"H¥ 

S38 


IRLF 


K6 


PANAMA  CANAL  TOLLS 


SYMPOSIUM  OF  VIEWS  PROTESTING  AGAINST 
A  SURRENDER  OF  AMERICAN  RIGHTS  AND 
UPHOLDING  THE  SJDE  OF  *fflE"TO 

STATES  IN  THE  TOLL  CONTROVERSY 


A  discussion  of  the  Hay-Pauncefoie  treaty,  of 
the  right  of  foreign  nations  to  interfere  in  our 
domestic  affairs,  and  of  the  influences  back  of 
the  effort  to  repeal  the  sections  of  the  Panama 
Canal  Act  beneficial  to  American  commerce 


Extracts  from  Congressional  Record  and  Public  Documents 
Compiled  by  Hon.  JOSEPH  R.  KNOWLAND,  of  California 

1912-1913 


WASHINGTON 
1913 


05272 


•  *••:•*:  •*••*; :    •  •*•     *: 
A::^;-:V.;<::..:^^  •• 


INDEX. 


Page. 

Declaration  from  Democratic  platform  in  favor  of  free  tolls  for  coastwise  ships. .  5 

Declaration  from  national  Progressive  platform  in  favor  of  free  tolls  for  coastwise 

ships ., 5 

Theodore  Roosevelt,  extracts  from  letter  in  Outlook 5 

Minority  report  of  House  Committee  on  Interstate  and  Foreign  Commerce,  ex- 
tracts from 6 

O'Gorman,  Hon.  James  A.,  from  speech  of,  in  United  States  Senate,  January 

22,  1913 '. 11 

Mann,  Hon.  James  R.,  from  speech  of,  in  House  of  Representatives,  January 

28,1913 13 

Interpretation  of  Hay-Pauncefote  treaty  by  Senators  present  when  treaty  was 

pending  before  United  States  Senate 15 

Smith,  Hon.  Hoke,  from  speech  of,  in  United  States  Senate,  August  7, 1912. . .  17 
Martine,  Hon.  James  E.,  from  speech  of,  in  United  States  Senate,  January  22, 

1913 18 

Williams,  Hon.  John  Sharp,  from  speech  of,  in  United  States  Senate,  August 

7,1912 19 

Thornton,  Hon.  John  R.,  from  speech  of,  in  United  States  Senate,  xVugust  6, 

1912 19 

Sulzer,  Hon.  William,  from  speech  of,  in  House  of  Representatives,  May  21, 

1912 20 

Newlands,  Hon.  Francis  G.,  from  speech  of,  in  UnitedStates  Senate,  January 

22,  1913 21 

Cannon,  Hon.  Joseph  G.,  from  speech  of,  in  House  of  Representatives,  May  18, 

1912 23 

Cooper,  Hon.  Henry  A.,  from  speech  of,  in  House  of  Representatives,  May  21, 

1912 24 

Borland,  Hon.  William  P.,  from  speech  of,  in  House  of  Representatives,  May 

17,  1912 25 

Lodge,  Hon.  Henry  Cabot,  from  speech  of,  in  United  States  Senate,  July  20, 

1912 .* 26 

Covington,  Hon.  J.  Harry,  from  speech  of,  in  House  of  Representatives.  May 

21,  1912 28 

Townsend,  Hon.  Charles  E.,  from  speech  of,  in  United  States  Senate,  July  18, 

1912 29 

Kahn,  Hon.  Julius,  from  speech  of,  in  House  of  Repre  entatives,  May  21, 1912. .  31 
Calder,  Hon  William  M.,  ;rom  speech  of,  in  House  of  Representatives,  May  19, 

1912 ; 32 

Cummins,  Hon.  A.  B.,  from  speech  of,  in  United  States  Senate,  August  7, 1912. .  33 
Jones,  Hon.  Wesley  L.,  from  speech  of,  in  United  States  Senate,  August  6, 1912.  42 
Doremus,  Hon.  Frank  E.,  from  speech  of,  in  House  of  Representatives,  May  16, 

1912 52 

Broussard,  Hon.  Robert  F.,  from  speech  of,  in  House  of  Representatives,  May 

21,1912 ... '.....  59 

Chamberlain,  Hon.  George  F.,  from  speech  of,  in  United  States  Senate,  August 

7,1912 60 

Alexander,  Hon.  Joshua  W.,  from  speech  of,  in  House  of  Representatives,  May 

17,1912 :. '. * '_....  65 

Humphrey,  Hon.  William  E.,  from  speech  of,  in  House  of  Representatives 

May  17,  1912 69 

Bradley,  Hon.  William  O.,  from  speech  of,  in  United  States  Senate,  July  29, 

Towner,  Hon.  Horace  M.,  from  speech  of,  in  House  of  Representatives  May  17, 

1912 77 

95272—12090  o 


Page. 
Knowland,  Hon.  Joseph  R.,  from  address  by,  on  "Significance  of  British 

Objections,"  before  Lake  Mohonk  Conference  on  International  Arbitration, 

May  16,  1913 81 

Taylor,  Dr.  Hannis,  from  address  by,  before  American  Society  of  International 

Law 87 

British  authorities,  Edwd.  S.  Cox-Sinclair  and  C.  A.  Hereshoff  Bartlett,  LL.B., 

uphold  position  of  United  States 91-97 

Olney,  Hon.  Richard,  ex-Secretary  of  State,  paper  by,  before  American  Society 

of  International  Law,  April  25,  1913 104 

Anderson,  Chandler  P.,  formerly  counselor  for  Department  of  State,  address  by, 

before  American  Society  of  International  Law 110 

"The  Panama  Canal — Shall  it  be  American  or  Anglo-American,"  by  Hon. 

Samuel  Seabury,  justice  of  the  Supreme  Court  of  ^  the  State  of  New  York 116 

Feuille,  Frank,  law  officer  of  Isthmian  Canal  Commission,  article  prepared  by. .  125 
Reference  to  newspaper  comment  and  resolutions  upholding  position  of  United 

States..  134 


95272 — 12000 


PANAMA  CANAL  TOLLS. 


EXTRACTS  FROM  CONGRESSIONAL  RECORD  AND 
PUBLIC  DOCUMENTS. 


SYMPOSIUM  OF  VIEWS  PROTESTING  AGAINST  A  SURRENDER 
OF  AMERICAN  RIGHTS  AND  UPHOLDING  THE  SID?  OF 
THE  UNITED  STATES  IN  THE  TOLL 


[From  the  Congressional  Record,  Feb.  G,   1913.] 

DECLARATION1  IN  PLATFORM  OF  NATIONAL.  DEMOCRATIC  PARTY 
UNANIMOUSLY  APPROVED  AT  BALTIMORE  ON  JULY  2,   1912. 

We  favor  the  exemption  from  tolls  of  American  ships  engaged  in  coastwise 
trade  passing  through  the  Panama  Canal.  We  also  favor  legislation  forbidding 
the  use  of  the  Panama  Canal  by  ships  owned  or  controlled  by  railroad  carriers 
engaged  in  transportation  competitive  with  the  canal. 


[From  the  Congressional  Record,  Feb.  G,  1913.] 

DECLARATION  IN  PLATFORM  OF  NATIONAL  PROGRESSIVE  PARTY 
UNANIMOUSLY  APPROVED  IN  CHICAGO  ON  AUGUST   7,    1912. 

The  Panama  Canal,  built  and  paid  for  by  the  American  people,  must  be  used 
primarily  for  their  benefit.  We  demand  that  the  canal  shall  be  so  operated 
as  to  break  transportation  monopoly  now  held  and  misused  by  the  transcon- 
tinental railroads,  by  maintaining  sea  competition  with  them ;  that  ships  directly 
or  indirectly  owned  or  controlled  by  American  railroad  corporations  shall  not 
be  permitted  to  use  the  canal,  and  that  American  ships  engaged  in  coastwise 
trade  shall  pay  no  tolls. 


[From  the  Congressional  Record,  Feb.  6,  1913.] 

EXTRACT  FROM  LETTER  OF  THEODORE  ROOSEVELT  IN  OUTLOOK, 

JANUARY    18,     1913. 

I  believe  that  the  position  of  the  United  States  is  proper  as  regards  this  coast- 
wise traffic.  I  think  that  we  have  the  right  to  free  bona  fide  coastwise  traffic 
from  tolls.  I  think  that  this  does  not  interfere  with  the  rights  of  any  other 
nation,  because  no  ships  but  our  own  can  engage  in  coastwise  traffic,  so  that 
there  is  no  discrimination  against  other  ships  when  we  relieve  the  coastwise 
traffic  from  tolls.  I  believe  that  the  only  damage  that  would  be  done  is  the 
damage  to  the  Canadian  Pacific  Railway.  Moreover,  I  do  not  think  that  it  sits 
well  on  the  representatives  of  any  foreign  nation,  even  upon  those  of  a  power 
with  which  we  are,  and  I  hope  and  believe  will  always  remain,  on  such  good 
terms  as  Great  Britain,  to  make  any  plea  in  reference  to  what  we  do  with  our 
own  coastwise  traffic,  because  we  are  benefiting  the  whole  world  by  our  action 
at  Panama,  and  are  doing  this  where  every  dollar  of  expense  is  paid  by  our- 
selves. In  all  history  I  do  not  believe  you  can  find  another  instance  where  as 
great  and  expensive  a  work  as  the  Panama  Canal,  undertaken  not  by  a  private 
corporation  but  by  a  nation,  has  ever  been  as  generously  put  at  the  service  of  all 
the  nations  of  mankind. 

95272 — 12090  K 


EXTRACTS  FROM  MINORITY  REPORT   SUBMITTED   TO  THE   HOUSE 
ON  MARCH  2O,    1912,  UPHOLDING  THE   RIGHT  OP   THE  UNITED 

STATES  TO  CONTROL  THE  PANAMA  CANAL. 

VIEWS  OF  THE  MINORITY. 

(To  accompany  H.  R.  21900  —  the  Panama  Canal  bill.) 

Firmly  convinced  that  the  United  States  has  the  right  to  relieve  American 
ships  engaged  in  the  coastwise  trade  from  the  payment  of  toll  charges  through 
the  Panama  Canal,  the  undersigned  members  of  the  Committee  on  Interstate 
and  Foreign  Commerce  dissent  from  the  report  accompanying  House  bill  21969 
submitted  by  the  majority  of  the  committee. 

This  Ml?,  in  so  far  as>  it  provides  for  levying  tolls  upon  vessels  engaged  in 

commercer,l>etweei^«atlieJSv?*ta%,  is  entirely  new  in  American  history.     From  the 

beginning  of  the  Government  to  the  present  time,  notwithstanding  that  we  have 

'l" 


.05  for  the  improvement  of  rivers  and  harbors  and  the 
E."  of  "eanalfc,,  exclusive  of  the  Panama  Canal,  it  has  never  entered  into 
the  conception  of  Congress  to  erect  a  tollgate  in  the  path  of  our  domestic  trade, 
for  the  benefit  of  which  these  improvements  have  been  made. 

The  minority  enters  an  emphatic  protest  against  the  abandonment  in  this  bill 
of  our  historic  policy  of  free  commercial  intercourse  between  the  States.  This 
great  canal,  built  for  the  American  people  by  American  money,  genius,  and 
enterprise,  should  be  forever  a  free  and  untramnieled  competing  route  with 
transportation  by  land.  We  can  not  emphasize  too  strongly  the  elementary 
proposition  that  tolls  levied  upon  vessels  engaged  in  commerce  between  our 
eastern  and  western  seaboards  increase  the  amount  the  transcontinental  mil- 
roads  may  charge  for  the  same  service.  If  a  vessel  en  route  from  San  Fran- 
cisco to  New  York  through  the  canal  were  required  to  pay  $10,000  in  tolls,  the 
transcontinental  railroads  would  largely  be  the  beneficiaries.  This  question 
affects  every  ton  of  domestic  freight  that  passes  through  the  canal  and  every 
ton  that  is  carried  across  the  country  by  the  railroads. 

The  talk  of  "  subsidizing  "  the  shipping  interests  at  the  expense  of  the  Ameri- 
can people,  is  mere  sophistry  and  only  befogs  the  issue.  The  tolls  imposed  at  the 
canal  would  be  added  to  the  freight  and  paid  by  the  American  people  who  con- 
sume the  commodities.  We  hold  this  proposition  to  be  fundamental;  and 
viewed  in  this  light,  free  tolls  to  our  coastwise  trade  would  not  be  a  subsidy  to 
shipowners,  but  a  concession  to  the  American  people.  Free  tolls  at  the  Panama 
Canal  to  our  coastwise  trade  would  be  the  same  kind  of  a  "  subsidy  "  that  wns 
granted  to  41,000,000  tons  of  shipping  that  passed  through  the  Soo  Canal  in 
1911.  It  is  true  that  we  levy  no  tolls  upon  Canadian  vessels  using  the  Boo 
Canal,  but  that  is  because  American  vessels  are  accorded  the  same  treatment  by 
the  Canadian  Government  at  the  Welland  Canal.  By  virtue  of  a  reciprocal 
arrangement  we  receive  our  quid  pro  quo  for  passing  Canadian  vessels  through 
the  Soo  Canal  free  of  charge.  We  disclaim  any  antipathy  against  the  railroads, 
but  insist  that  this  initial  legislation  for  the  government  and  management  of 
the  Panama  Canal  shall  not  take  money  from  the  pockets  of  the  American 
people  and  give  it  to  the  great  corporations  that  have  already  been  munificently 
treated  by  the  Federal  Government. 

In  a  comparatively  few  instances  opposition  to  free  tolls  has  developed  in 
certain  localities  in  the  Middle  AVest,  based  upon  the  erroneous  assumption  that 
any  reductions  in  freight  rates  between  the  Atlantic  and  Pacific  seaboards  will 
give  the  Pacific,  Gulf,  and  Atlantic  coast  cities  an  advantage  over  the  Middle 
West  cities  in  competing  for  the  trade  of  the  intermountain  section  of  the  West. 
There  might  be  some  ground  for  this  assumption  were  it  not  for  the  fact  that 
rail  freight  rates  between  the  Middle  West  and  the  Pacific  coast  never  exceed 
those  between  the  Atlantic  and  Pacific  seaboards  and.  are  frequently  lower. 
Any  reduction  in  rail  freight  rates  forced  by  sea  competition  between,  say.  New 
York  and  San  Francisco  is  contemporaneously  applied  between  Chicago,  St. 
Paul,  St.  Louis,  Kansas  City,  and,  in  fact,  every  city  of  the  Middle  West  on  the 
one  hand  and  every  Pacific  coast  city  or  town  on  the  other.  This  always  has 
been  so  —  it  always  will  be  so.  The  selfish  interests  of  the  railroads  serving  the 
Middle  West  is  the  strongest  possible  guaranty  of  the  perpetuity  of  this  already 
well-established  rate-making  system.  No  road  operating  between  St.  Paul  and 
Seattle  will  permit  a  lower  rail  rate  to  exist  between  New  York  and  Seattle 
than  exists  between  St.  Paul  and  Seattle,  otherwise  St.  Paul's  trade  would  be 
captured  by  New  York. 

95272—12090 


Therefore  if,  by  reason  of  free  tolls  to  vessels  iu  the  coastwise  trade,  freight 
rates  between  New  York  and  Seattle  are  $1  per  ton  less  than  they  would  be  if 
tolls  were  charged,  they  will  by  the  same  measure  be  less  between  St.  Paul  and 
Chicago  and  Omaha  and  St.  Louis  and  Kansas  City  on  the  one  hand  and  Seattle 
and  Portland  and  San  Francisco  and  Los  Angeles  and  San  Diego  on  the  other. 
It  is  not  for  the  merchants,  manufacturers,  producers,  and  consumers  of  the 
Middle  West  to  do  other  than  to  heartily  favor  free  tolls.  It  is  to  be  expected, 
however,  that  the  railroads  serving  the  Middle  West,  and  for  that  matter  the 
entire  country,  will  strenuously  oppose  free  tolls  and  with  equal  strenuosity 
advocate  the  highest  tolls  possible,  the  only  limit  being  those  charged  contem- 
poraneously through  Suez.  Inasmuch  as  rates  between  the  entire  country  east 
of  the  Missouri  River  on  the  one  hand  and  the  intermountain  section  on  the 
other  are  based  upon  the  coast-to-coast  rates,  it  is  obvious  that  free  tolls  would 
be  equally  advantageous  to  this  section  as  to  all  other  sections  of  the  country. 
Free  tolls  can  not  but  minimize  rail  freight  rates  on  all  the  manufactures  of 
the  Atlantic  seaboard  and  the  Middle  West,  the  products  of  the  great  Mississippi 
Valley,  and  those  of  the  Pacitic  coast,  to  the  ultimate  advantage  of  the  producers 
and  consumers  throughout  the  entire  country.  Nor  are  reductions  in  rail  rates 
the  only  advantages  which  the  people  of  the  great  interior  of  our  country  are  to 
reap  from  free  tolls.  They  have  even  a  more  direct  interest. 

Much  of  the  commerce  of  the  great  Mississippi  Valley  will  flow  down  the 
rivers  which  drain  it  to  the  Gulf  and  thence  through  the  canal  to  the  Pacific 
coast.  Likewise  Pacific  coast  products  will,  under  free  tolls,  to  a  large  extent 
eventually  be  distributed  throughout  the  Middle  West  via  her  waterways.  The 
completion  of  the  Lakes  to  Gulf  waterway  project  will  make  it  not  alone  pos- 
sible but  practicable  to  exchange  Pacific  coast  lumber  for  Lake  Superior  ore 
without  either  commodity  touching  the  floor  of  a  freight  car.  Every  burden 
placed  upon  traffic  through  the  canal  impairs  its  usefulness  as  a  competitive 
route  and  decreases  its  benefits  to  the  American  people. 

*  *  *  *  *  *  * 

While  disclaiming  any  intention  to  interpret  the  Hay-Pa nncefote  treaty  in 
favor  of  foreign  shipping  interests,  the  majority  report  proceeds  to  call  atten- 
tion to  the  rejection  of  an  amendment  offered  in  the  Senate  when  the  treaty 
wns  pending  reserving  to  the  United  States  the  right  to  discriminate  in  favor 
of  vessels  of  its  own  citizens  engaged  in  the  coastwise  trade.  It  is  a  matter  of 
record  that  this  amendment,  offered  by  Senator  Bard,  of  California,  was  re- 
jected by  a  vote  of  27  yeas  and  43  nays.  On  the  same  day,  however,  an  amend- 
ment was  offered  (see  S.  Doc.  85,  57th  Cong.,  1st  sess.)  reserving  the  right  to 
the  United  States  to  protect  said  canal  in  any  way  it  might  deem  proper.  This 
amendment  was  rejected  on  roll  call — yeas  27,  nays  44 — and  this  was  the  fate 
of  several  other  amendments  similarly  reserving  to  the  United  States  the  right 
to  fortify  the  canal.  It  is  unnecessary  to  call  attention  to  the  fact  that  forti- 
fications are  now  being  constructed.  With  further  reference  to  the  Bard  amend- 
ment we  have  been  granted  authority  to  quote  from  a  letter  recently  written  by 
Senator  Bard  in  the  course  of  which  he  states : 

When  my  amendment  was  under  consideration  it  was  generally  conceded  [the  Italics  are 
his]  by  Senators  that  even  without  that  specific  provision  the  rules  of  the  treaty  would 
not  prevent  our  Government  from  treating  the  canal  as  part  of  our  coast  line  and  conse- 
quently could  not  be  construed  as  a  restriction  of  our  interstate  commerce,  forbidding  the 
discrimination  in  charges  for  tolls  in  favor  of  our  coastwise  trade,  and  this  conviction 
contributed  to  the  defeat  of  the  amendment. 

We  contend  that  our  right  to  favor  our  own  shipping  in  the  matter  of  cnnal 
tolls  can  not  be  seriously  questioned.  The  minority  is  not  forced  to  offer  profuse 
apologies  for  its  position.  The  message  of  President  Taft  sent  to  Congress  in 
December  (H.  Doc.  343,  62d  Cong.,  2d  sess.)  has  the  true  American  ring,  and 
clearly  states  the  case.  These  are  the  President's  words: 

I  am  confident  that  the  United  States  has  the  power  to  relieve  from  the  payment  of 
tolls  any  part  of  our  shipping  that  Congress  deems  wise.  We  own  the  canal.  It  was  our 
money  that  built  it.  We  have  the  right  to  charge  tolls  for  its  use.  Those  tolls  must  be 
the  same  to  everyone,  but  when  we  are  dealing  with  our  own  ships,  the  practice  of  many 
Governments  of  subsidizing  their  own  merchant  vessels  is  so  well  established  in  general 
that  a  subsidy  equal  to  the  tolls,  as  equivalent  remission  of  tolls,  can  not  be  held  to  be 
a  discrimination  in  the  use  of  the  canal.  The  practice  in  the  Suez  Canal  makes  this  clear, 
v  ****** 

The  minority  disagrees  entirely  with  the  view  of  the  majority  that  the  Hay- 
Pa  imcefote  treaty  makes  it  impossible  for  Congress  to  prefer  our  own  vessels 
engaged  in  the  coastwise  trade.  That  portion  of  article  3  of  the  treaty  which 

95272 — 12090 


it  is  claimed  would  be  violated  by   preferring  our  coastwise  trade  reads  as 
follows : 

The  United  States  adopts  as  the  basis  of  the  neutralization  of  such  ship  canal  the 
following  rules,  substantially  as  embodied  in  the  convention  of  Constantinople,  signed  the 
28th  of  October,  1888.  for  the  free  navigation  of  the  Suez  Canal,  that  is  to  say  : 

].  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all 
nations  observing  these  rules  on  terms  of  entire  equality,  so  that  there  shall  be  no  dis- 
crimination against  such  nation  or  its  citizens  or  subjects  in  respect  of  the  conditions 
or  charges  of  traffic  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be  just  and 
equitable. 

It  is  manifest,  from  the  reading  of  the  treaty,  that  its  purpose  was  to  pre- 
vent discrimination  against  other  nations.  That  free  tolls  to  our  coastwise 
vessels  would  not  discriminate  against  the  vessels  of  other  countries  becomes 
apparent  when  we  reflect  that  under  our  navigation  laws  foreign  vessels  are 
prohibited  from  engaging  in  our  coastwise  trade.  That  being  true,  it  is  of  no 
concern  to  foreign  nations,  their  citizens  or  subjects,  what  treatment  we  accord 
to  our  coastwise  trade. 

Foreign  nations  have  not  considered  that  they  were  violating  the  rules  for 
the  neutralization  of  the  Suez  Canal  by  rebating  tolls  to  vessels  flying  their 
own  flag.  The  contemporaneous  construction  that  the  powers  signatory  to 
the  convention  of  Constantinople  have  given  that  instrument  supports  the 
position  of  the  minority  that  we  have  a  perfect  right  under  the  Hay-Pa uncefote 
treaty  to  favor  our  domestic  shipping ;  and  if  we  have  the  right  to  collect  the 
tolls  at  the  canal  and  repay  them,  we  certainly  have  the  right  to  remit  them 
in  the  first  instance.  It  is  unnecessary  to  resort  to  a  device  or  subterfuge  in 
order  to  do  indirectly  what  we  have  a  right  to  do  directly. 

It  will  be  observed  that  the  treaty  provides  that  "  the  canal  shall  be  free 
and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations  observing  these 
rules  on  terms  of  entire  equality,"  yet  this  bill  expressly  reserves  the  right 
of  the  United  States  Government  to  pass  its  own  ships  of  war  through  the 
canal  without  the  payment  of  any  tolls.  We  confess  our  inability  to  see  the 
logic  or  consistency  of  the  position  of  the  majority  that  free  tolls  to  ships  of 
commerce  would  be  a  violation  of  the  treaty,  but  that  free  tolls  to  ships  of  war 
would  not  be  a  violation  of  the  treaty.  The  majority  seek  to  justify  the  right 
to  exempt  war  vessels  of  the  United  States  from  the  payment  of  tolls  under 
that  clause  of  the  treaty  which  provides  that  "the  United  States  enjoys  all 
the  rights  incident  to  construction  as  well  as  the  exclusive  right  of  providing 
for  the  regulation  and  management  of  the  canal." 

Under  any  fair  construction  of  the  treaty,  however,  this  language  must  be 
considered  in  connection  with  the  rules  that  are  adopted  in  the  treaty  for  the 
regulation  and  management  of  the  canal.  In  other  words,  under  the  treaty 
the  United  States  enjoys  all  the  rights  incident  to  the  construction  as  well 
as  the  exclusive  right  of  providing  for  the  regulation  and  management  of  the 
canal,  subject,  however,  to  the  rules  therein  provided  for  its  regulation  and 
management.  These  rules,  as  we  have  already  seen,  provide  that  the  canal 
shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  these  rules  on  terms  of  entire  equality.  If  this  language  was  in- 
tended to  prevent  preferring  our  own  vessels,  it  must  apply  equally  to  both 
vessels  of  commerce  and  vessels  of  war.  Such  a  construction  is  inconsistent 
with  the  very  purpose  of  the  canal,  which  was  conceived  primarily  as  a  mili- 
tary necessity. 

The  majority  dismissed  the  case  of  Olsen  1?.  Smith  (195  U.  S.,  332)  with 
the  remark  that  it  has  no  application  to  the  situation  with  which  we  are 
dealing,  notwithstanding  an  examination  of  the  case  would  have  disclosed  that 
on  the  question  of  discrimination  it  is  on  all  fours  with  the  subject  we  are 
now  considering.  In  that  case  the  treaty  with  Great  Britain  provided  that 
"  no  higher  or  other  duties  or  charges  shall  be  imposed  in  any  ports  of  the 
United  States  on  British  vessels  than  those  payable  in  the  same  ports  by 
vessels  of  the  United  States." 

The  court  held  that  this  treaty  was  not  violated  by  either  the  Texas  statute 
or  the  Revised  Statutes  of  the  United  States,  section  4444,  exempting  coastwise 
steam  vessels  from  the  payment  of  pilotage  charges.  In  that  connection, 
speaking  for  the  court,  Mr.  Justice  White,  now  Chief  Justice,  said: 

Nor  is  there  merit  in  the  contention  that  as  the  vessel  in  question  was  a  British  vessel, 

coming  from  a  foreign  port,  the  State  laws  concerning  pilotage  are  in  conflict  with   the 

treaty  between  Great  Britain  and  the  United  States,   providing  that  "no  higher  or  other 

duties  or  charges  shall  be  imposed  in  any  ports  of  the  United  States  on  British  vessels 

95272—12090 


than  those  payable  in  the  same  ports  by  vessels  of  the  United  States."  Neither  the 
exemption  of  coastwise  steam  vessels  from  pilotage  resulting  from  the  law  of  the  United 
States  nor  any  lawful  exemption  of  coastwise  vessels  created  by  the  State  law  concerns 
vessels  in  the  foreign  trade,  and,  therefore,  any  such  exemptions  do  not  operate  to 
produce  a  discrimination  against  British  vessels  engaged  in  foreign  trade  and  in  favor  of 
the  vessels  of  the  United  States  in  such  trade.  In  substance,  the  proposition  but  asserts 
that  because  by  the  law  of  the  United  States  steam  vessels  in  the  coastwise  trade  have 
been  exempt  from  pilotage  regulations,  therefore  there  is  no  power  to  subject  vessels  in 
foreign  trade  to  pilotage  regulations,  even  though  such  regulations  apply  without  dis- 
crimination to  all  vessels  engaged  in  such  foreign  trade,  whether  domestic  or  foreign. 

If  a  treaty  with  Great  Britain  providing  that  "  no  higher  or  other  duties  or 
charges  shall  be  imposed  in  any  ports  of  the  United  States  on  British  vessels 
than  those  payable  in  the  same  ports  by  vessels  of  the  United  States  "  is  not 
violated  by  an  exemption  in  favor  of  our  own  vessels  engaged  in  coastwise  trade 
from  payment  of  pilotage  charges,  it  must  necessarily  follow  that  the  Hay- 
Pauncefote  treaty  would  not  be  violated  by  a  similar  exemption  of  our  coast- 
wise vessels  from  the  payment  of  tolls  at  the  Panama  Canal. 

The  Panama  Canal  is  being  built  on  territory  which  was  purchased  by  the 
Government  of  the  United  States.  We  will  expend  in  its  construction  upward 
of  $400,000,000,  and  are  obligated  by  treaty  to  pay  the  Republic  of  Panama  in 
perpetuity  the  sum  of  .$250,000  annually.  We  occupy  the  position  of  sovereign 
proprietor  of  the  canal  and  the  Canal  Zone,  a  relation  that  none  of  the  nine 
powers  signatory  to  the  convention  of  .Constantinople  sustained  with  reference 
to  the  Suez  Canal.  The  Hay-Pauncefofe  treaty  should  be  construed  in  the  light 
of  these  facts,  and  when  so  construed  the  minority  can  not  escape  the  conclu- 
sion that  in  signing,  ratifying,  and  proclaiming  this  treaty  to  the  world  we  were 
merely  agreeing  to  the  terms  and  conditions  upon  which  the  United  States,  the 
sovereign  owner  of  the  canal,  would  permit  its  use  by  the  other  nations  of  the 
world,  its  citizens  or  subjects. 

«  *  *  *  *  *  * 

The  minority  believe  in  the  religious  observance  of  our  treaty  obligations  as 
essential  to  the  maintenance  of  our  own  self-respect  and  the  confidence  and 
friendly  regard  of  other  nations;  but  we  refuse  to  assent  to  the  mere  sugges- 
tion, to  say  nothing  of  the  bold  declaration,  that  by  the  Hay-Pauncefote  treaty 
we  have,  without  consideration,  bartered  away  to  a  foreign  nation  the  con- 
stitutional power  of  Congress  to  regulate  commerce  between  the  United  States 
and  encourage  the  upbuilding  and  growth  of  our  domestic  shipping. 

Since  1884  we  have  consistently  adhered  to  a  policy  enunciated  in  the  river 
and  harbor  act  of  that  year,  section  4  of  which  provided : 

No  tolls  or  operating  charges  whatever  shall  be  levied  upon  or  collected  from  any 
vessel,  dredge,  or  other  water  craft  for  passing  through  any  lock,  canal,  canalized  river, 
or  other  work  for  the  use  and  benefit  of  navigation  now  belonging  to  the  United  States 
or  that  may  be  hereafter  acquired  or  constructed. 

The  Secretary  of  the  Treasury  has  recently  sent  to  the  Senate,  in  response  to 
a  resolution  from  that  body,  a  letter  transmitting  information  relating  to  ex- 
penditures for  rivers  and  harbors  from  the  establishment  of  the  Government 
to  the  close  of  the  fiscal  year  ending  June  30,  1911.  ( See  S.  Doc.  No.  382,  62d 
Cong.,  2d  sess.)  This  statement  shows  that  the  total  expenditures  upon  rivers, 
harbors,  and  canals  (exclusive  of  the  Panama  Canal)  has  reached  the  enor- 
mous total  of  $627,008,236.05.  •  The  whole  country  has  borne  the  burden,  and 
no  one  has  suggested  that  it  be  placed  solely  upon  American  shipping.  It  has 
not  been  seriously  urged  that  the  cost  of  maintenance  even  be  imposed  upon 
commerce.  For  instance,  $121,142,554.41  has  been  spent  by  the  Government 
upon  the  Mississippi  River,  and  it  is  now  proposed  to  expend  a  greater  sum  to 
provide  a  deep  waterway  from  the  Lakes  to  the  Gulf.  Upon  the  Missouri 
River  has  been  expended  $11,425,056.90,  while  the  Ohio  River  has  been  aided 
by  the  Government  to  the  extent  of  $23,548,338.15.  While  it  might  be  argued 
that  the  people  of  the  Atlantic  and  Pacific  coasts  are  receiving  no  direct  benefit 
from  these  river  improvements,  they  are  not  urging  that  those  States  and  inter- 
ests directly  tributary  to  the  Mississippi,  Ohio,  and  Missouri  Rivers  be  singled 
out  to  bear  the  burden  of  these  enormous  expenditures. 

$****## 

In  answer  to  those  who  hold  that  the  Government  should  at  least  obtain  a 
revenue  from  the  canal  sufficient  to  cover  the  operating  expenses,  which  they 
fear  would  be  impossible  if  we  remitted  tolls  to  American  ships  in  the  coast- 
wise trade,  we  will  show  from  the  evidence  that  tolls  can  be  remitted  and  a 
revenue  obtained  with  a  toll  of  $1.20  per  net  register  ton  upon  ships  other  than 

95272—12090 


10 

those  engaged  in  interstate  commerce  sufficient  to  pay  double  the  expense  of 
operation,  maintenance,  sanitation,  and  civil  government. 

******* 

At  the  hearings  before  the  committee,  Prof.  Emory  R.  Johnson,  employed  by 
the  Government  especially  to  make  traffic  computations,  and  whose  estimates  are 
generally  regarded  as  very  conservative,  reported  that  the  net  register  tonnage 
of  vessels  that  might  have  advantageously  used  a  Panama  Canal  in  1.900-10 
ws  8,328,029  net  tons.  We  quote  the  statement  of  Prof.  Johnson,  found  on 
page  698  of  the  printed  committee  hearings : 

It  was  found  in  1899-1900  that  5,000,000  tons  net  register  of  shipping  was  then 
available  for  the  use  of  the  Panama  Canal.  The  increase  during  the  11  years  ending 
June  30,  1910,  was  66$  per  cent,  or  at  the  rate  of  59  per  cent  per  decade.  That  rate  of 
increase,  projected  to  1914—15,  would  mean  an  increase  of  2G.8  per  cent  during  the  five 
years  following  1910,  which  would  bring  the  total  of  8,328,000  to  10,500,000  tons  at  the 
time  of  the  opening  of  the  canal. 

Of  this  total  it  is  estimated  that  but  1,100,000  net  register  tons  will  be  coast- 
to-coast  traffic.  (See  statement  Prof.  Johnson,  committee  hearings,  p.  705.) 
We  have  shown  that  since  1899  all  the  estimates  of  possible  canal  ^traffic  have 
been  understatements,  and  in  our  opinion  this  is  due  to  the  fact  that  few  have 
anticipated  the  wonderful  growth  in  ocean  steam  navigation.  When  the  Suez 
Canal  was  opened  in  1809  the  world's  shipping  comprised  16,042,498  net  tons 
sail  vessels,  and  only  2,793,432  net  tons  steam  vessels.  In  1911  the  world's 
tonnage  comprised  22,338,549  net  tons  steam  vessels,  and  only  6,152,977  tons 
sail  vessels.  The  canal,  as  constructed,  can  handle,  according  to  the  estimate 
of  Col.  Goethals  (committee  hearings,  p.  413),  80,000,000  tons  a  year. 

No  estimate  has  been  or  can  be  prepared  which  will  give  its  business  for 
1915  at  less  than  8,000,000  net  tons,  and  we  are  inclined  to  the  view  that  Prof. 
Johnson's  estimate  of  10,500,000  net  register  tons  is  very  conservative.  *  *  * 

The  majority  report  (p.  4)  states  that  "  it  will  require  $4,000,000  or  $5,000,000 
a  year  to  maintain  and  operate  the  canal  and  administer  its  adjuncts." 

The  careful  and  detailed  estimates  of  Col.  Goethals  show  that  the  total  annual 
cost  of  the  opsration  and  maintenance  of  the  canal,  including  the  cost  of  sanitation 
and  civil  government,  will  not  exceed  $4,000,000,  and  that  it  is  hoped  to  realize 
a  profit  from  the  sale  of  supplies,  etc.,  to  bring  this  down  to  $3,500,000.  (See 
committee  hearings,  pp.  410,  411,  415,  and  417.)  Analyzing  the  figures  of  Prof. 
Johnson,  we  find  that  a  toll  of  $1.20  per  net  register  ton  would  bring  in  a  total 
annual  revenue  during  the  first  year,  exclusive  of  passenger  tolls,  of  $12,600,000. 
Subtracting  the  interstate  commerce  traffic  (American  coastwise),  which  Prof. 
Johnson  estimates  at  1,160,000  tons,  we  would  still  have  an  annual  revenue  of 
$11,208,000,  more  than  double  the  operating  expenses,  with  the  tonnage  annually 
increasing. 

We  resent  the  charge  contained  on  page  6  of  the  majority  report  that  "  this 
small  shipping  interest  has  secured  recommendations  from  some  trade  organiza- 
tions in  various  coast  cities  of  the  country  on  the  erroneous  theory  that  ship- 
pers would  secure  the  benefits  of  the  remitted  tolls."  These  "  trade  organiza- 
tions," which  are  spoken  of  so  sneeringly,  are  not  all  located  in  coast  cities. 
For  instance,  the  Lakes- to- the- Gulf  Deep  Waterways  Association,  which  unani- 
mously passed  the  following  resolutions,  is  not  a  coast  organization : 

The  policy  of  free  waterways  is  fundamental  with  the  American  people,  and  hence  this 
association  declares  that  this  principle  should  be  extended  to  our  coastwise  trade  through 
the  Panama  Canal. 

The  1,200  delegates  attending  the  National  Rivers  and  Harbors  Congress, 
which  convened  in  Washington  last  December,  were  not  influenced  by  the 
"  small  shipping  interest."  We  might  likewise  mention  the  Boston  Chamber  of 
Commerce,  the  National  Board  of  Trade,  the  Navy  League  of  the  United  States, 
the  Philadelphia  Chamber  of  Commerce,  the  New  Orleans  Progressive  Union, 
the  New  York  Board  of  Trade  and  Transportation,  the  Merchants'  Association 
of  New  York,  the  Maritime  Association  of  the  Port  of  New  York,  and  various 
other  representative  bodies,  these  resolutions  being  appended  as  a  part  of  this 
report. 

We  contend  that  no  better  opportunity  was  ever  offered  for  the  development 
of  an  American  merchant  marine  and  the  establishment  of  a  fleet  of  naval 
auxiliaries,  which  would  be  available  in  time  of  war. 

There  is  no  doubt  that  the  founders  of  the  Government  and  the  frnmers  of 
the  Constitution  intended  to  provide  for  free  and  unrestricted  commerce  be- 
tween the  States.  Certain  it  is  that  such  has  been  our  national  policy  from 
95272—12090 


11 

the  beginning.  It  would  be  a  cause  for  sincere  regret  to  all  lovers  of  this 
ancient  institution  if  now,  at  the  threshold  of  the  opening  of  this  great  canal, 
fraught  with  such  wonderful  commercial  possibilities  to  the  American  people, 
we  should  depart  from  the  path  that  has  so  long  been  pursued. 

ROUERT  F.  BROUSSARD. 
HENRY  M.  GOLDFOGLE.    | 
FRANK  E.  DOBEMUS.       ! 
JOSEPH  R.  KNOWLAND.  ' 
WILLIAM  M.  CALDER. 


FROM  SPEECH  OF  HON.  JAMES  A.  O'GORMAN,  OF  NEW  YORK,  IX 
THE  SENATE  OF  THE  UNITED  STATES  JANUARY  22,  1913. 

Mr.  O'GORMAN.  Mr.  President,  as  I  understand  the  bill  which  is  being  dis- 
cussed, it  provides  for  the  repeal  of  a  clause  in  the  Panama  Canal  law  exempting 
coastwise  vessels  from  the  payment  of  tolls,  and,  in  the  alternative,  recom- 
mends that  the  disputed  Question  of  interpretation  and  construction  of  the  Hay- 
Paimcefote  treaty  be  referred  to  arbitration.  I  am  unalterably  opposed  to  both 
propositions. 

It  has  been  stated  that  the  legislation  enacted  at  the  last  session  was  ill- 
advised  and  hasty  and  without  proper  consideration.  I  am  sure  when  that 
statement  was  made  to  the  Senate  the  Senators  who  heard  the  declaration  were 
surprised,  because  it  is  within  the  knowledge  of  every  Member  of  the  body  that 
the  bill  enacted  at  the  last  session  for  the  regulation  of  the  Panama  Canal 
received  the  consideration  of  the  Interoceanic  Canal  Committee  for  many 
months  and  was  the  subject  of  discussion  on  the  floor  of  the  Senate  from  time 
to  time  for  perhaps  four  or  five  weeks.  Many  Senators  participated  in  the 
discussion ;  and  after  very  thoughtful  consideration  of  the  merits  of  the  bill, 
with  the  same  objections  then  urged  that  we  have  heard  in  the  last  day  or  two, 
the  Senate  adopted  the  existing  law  by  a  vote  of  45  in  its  favor  against  15  in 
opposition. 

The  great  remedy  which  was  sought  to  be  accomplished  by  that  law  receives 
very  little  attention  and  was  scarcely  alluded  to  by  those  who  opposed  its  pas- 
sage. It  was  sought  by  the  proper  use  of  the  Panama  Canal  to  place  a  whole- 
some restraint  upon  the  transcontinental  railroads  in  the  imposition  of  their 
charges.  It  is  common  knowledge  that  for  many  years  the  transcontinental  rail- 
roads looked  with  disfavor  upon  the  building  of  a  Panama  Canal,  because  those 
interested  in  the  railroads  knew  that  with  the  opening  of  the  Panama  Canal 
cheap  transportation  by  water  would  require  the  railroads  to  reduce  their  rates 
and  would  deprive  them  of  the  monopoly  which  they  sought  to  obtain. 

******* 

You  rarely  hear  in  the  discussion  of  the  Panama  Canal  bill  any  reference  to 
its  railroad  features.  I  concede  that  the  provisions  which  seek  to  exclude  rail- 
roads from  the  use  of  the  waterways  of  the  country  are  drastic,  but  I  insist 
that  they  are  necessary  if  the  people  of  the  country  are  to  be  saved  from  the 
domination  of  great  monopolies. 

We  provided  in  the  bill  that  our  coastwise  ships  should  be  permitted  to  use 
the  canal  free.  We  were  induced  to  this  course  by  two  considerations :  First,  to 
encourage  our  coastwise  shipping ;  and,  second  and  more  important,  to  secure  the 
cheapest  possible  transportation  by  water.  Cheap  water  transportation  will 
compel  the  competing  transcontinental  railroads  to  maintain  reasonable  rates. 
The  main  purpose  of  the  legislation  was  to  reduce  the  cost  of  domestic  trans- 
portation. This  clearly  presents  a  question  of  domestic  policy,  having  no  rela- 
tion to  international  obligations. 

Of  course,  we  hear  it  said  "  You  have  violated  the  treaty  with  Great  Britain," 
and  we  are  told  from  time  to  time  that  we  must  maintain  our  reputation  for 
national  integrity  with  the  countries  of  the  world.  But  we  have  not  violated 
the  treaty  by  exempting  our  coastwise  vessels.  England,  under  a  similar  act 
passed  in  1815  guaranteeing  equality  to  the  ships  of  the  United  States  in  the 
harbors  of  Great  Britain,  has  for  98  years  discriminated  in  favor  of  her  local 
shipping.  We  have  some  people  in  this  country  who  are  more  English  than  the 
English  themselves  in  the  consideration  of  our  treaty  relations. 

We  are  told  that  possibly  a  painful  impression  will  be  made.  I  am  sure 
that  a  painful  impression  will  be  made  abroad  if  we  surrender  one  of  the 

95272 — 12090 


12 

most  essential  attributes  of  sovereignty.  We  can  never  permit  a  foreign  power 
to  intrude  upon  us  its  views  affecting  our  domestic  policy.  If  we  yield  once, 
further  encroachments  will  be  made  upon  our  integrity  as  a  Nation. 

*     .  #  *  *  *  *  « 

It  has  been  stated  that  during  the  progress  of  the  negotiations  preceding 
the  adoption  of  the  Hay-Pauncefote  treaty  Senator  Bard  proposed  in  sub- 
stance the  adoption  of  a  declaration  that  the  provisions  under  discussion  were 
not  intended  to  affect  the  vessels  of  the  United  States.  It  is  said  that  was 
voted  down  at  the  time,  and  that  therefore  it  is  a  concession  that  no  vessels  of 
the  United  States  should  be  exempted  from  the  provisions  of  the  Hay-Paunce- 
fote treaty.  But  I  ask  whether  it  is  not  more  probable  that  the  reason  the 
suggested  provision  was  voted  down  was  that  many  of  the  lawyers  in  this 
body  deemed  it  wholly  unnecessary;  that  the  treaty  as  it  was  originally  pro- 
posed conferred  that  right  upon  the  United  States,  and  needed  no  modification 
in  that  regard? 

We  are  reminded  that  we  have  been  the  apostles  of  the 'peace  movement; 
that  we  wyould  be  untrue  to  our  traditions  if  we  did  not  permit  this  question 
to  be  disposed  of  by  an  arbitration  court.  In  some  quarters  it  is  forgotten 
that  a  year  ago,  after  long  discussion,  the  Senate  refused  to  enter  into  a  treaty 
with  any  foreign  power  by  which  every  controversy  was  to  be  settled  by  arbi- 
tration. We  have  numerous  arbitration  treaties  now,  but  every  treaty  ex- 
cludes from  submission  to  arbitration  three  classes  of  questions — those  affect- 
ing our  national  honor,  our  vital  interests,  and  the  rights  of  third  parties. 
And  we  have  solemnly  refused  to  go  further  in  support  of  arbitration  policies. 

The  question  confronting  us  is,  Shall  we  permit  foreign  Governments  to  dic- 
tate to  the  United  States  respecting  our  domestic  policies?  If  our  right  to 
pursue  a  domestic  policy  be  challenged  by  a  foreign  power,  our  national  in- 
tegrity is  impeached  if  we  yield  to  such  an  influence. 

Senators,  I  can  conceive  of  no  question  more  vitally  affecting  our  national 
honor  and  integrity  than  a  question  such  as  is  proposed  to  us  nowr — that  a 
domestic  policy  inaugurated  by  the  Congress  of  the  United  States  for  the 
benefit  of  the  American  people  must  first  secure  the  approval  of  a  foreign 
nation,  *  *  * 

Can  you  imagine  what  would  happen  if  our  positions  were  reversed  and  if 
we  presumed  to  dictate  to  a  foreign  power  what  its  domestic  policy  should  be, 
and  if  when  the  foreign  power  refused  to  yield  to  our  dictation  we  should  say, 
"  Well,  this  is  a  proper  case  for  an  international  tribunal "  ? 

As  President  Cleveland  said  on  an  historic  occasion,  "  There  is  no  calamity 
which  a  great  nation  can  invite  which  equals  that  which  follows  a  supine  sub- 
mission to  wrong  and  injustice  and  the  consequent  loss  of  national  self-respect 
and  honor,  beneath  which  are  shielded  and  defended  a  people's  safety  and 
greatness." 

It  must  not  be  forgotten  that  you  can  never  have  an  international  tribunal 
where  the  representatives  of  a  foreign  power  are  in  sympathy  with  the  Monroe 
doctrine.  Foreign  powers  tolerate  the  Monroe  doctrine,  but  they  do  not  recog- 
nize it  as  international  law. 

If  Great  Britain  had  expended  almost  half  a  billion  dollars  in  a  public 
enterprise  affecting  the  people  of  that  country,  what  would  be  her  answer  if 
the  United  States  undertook  to  impose  undue  restraint  upon  Great  Britain's 
use  of  her  own  property?  Nor  should  the  circumstance  be  overlooked  that  in 
this  legislation  the  very  thing  of  which  complaint  is  made  is  something  \vhich 
Great  Britain  concededly  can  do.  Yet  she  would  refuse  the  like  privilege  to 
us,  notwithstanding  the  fact  that  we  built  the  canal  and  that  the  people  of 
the  United  States  contributed  over  $400,000,000  for  that  purpose. 

England  and  every  European  country  for  years  have  been  subsidizing  their 
vessels  going  through  the  Suez  Canal.  It  is  fair  to  suppose  that  England  and 
other  European  powers  will  continue  to  subsidize  their  vessels  going  through 
the  Panama  Canal  in  their  struggle  for  the  commerce  of  the  world.  While 
there  is  nothing  in  the  treaty  which  would  prevent  England  or  France  or 
Germany  or  Spain  subsidizing  their  vessels,  Great  Britain  would  impose  cer- 
tain restraints  upon  us.  That,  at  least,  was  the  attitude  of  the  British  Gov- 
ernment in  the  first  message  which  was  received  in  June  or  July  of  last  year. 
I  understand  the  British  Government  has  receded  somewhat  from  the  position 
it  then  took ;  that  in  a  measure  it  now  recognizes  our  right  to  subsidize  our 
vessels  and  to  remit  the  tolls,  but  insists  that  we  must  collect  them  in  the  first 
95272—12090 


13 

instance ;  and  because  we  refuse  to  do  that,  the  suggestion  is  made  that  England 
is  discriminated  against  and  that  we  must  have  an  arbitration. 

There  is  no  principle  better  established  than  that  the  law  never  requires  the 
performance  of  an  idle  ceremony,  because  an  idle  ceremony  is  a  useless  and 
unsubstantial  performance.  Yet  under  one  view  advanced  by  Great  Britafn 
she  would  insist  that  we  must  collect  the  toll  as  our  vessel  passes  through, 
even  though  we  immediately  return  it. 

Of  course,  the  claim  was  made  at  first,  in  the  general  discussion  last  July 
or  August,  that  we  could  not  under  any  circumstances  return  any  part  of  the 
toll,  but  I  believe  that  Great  Britain  herself  has  receded  from  that  position. 

I  do  not  intend,  Mr.  President,  in  view  of  the  time  I  devoted  to  a  discussion 
of  this  question  on  a  former  occasion,  to  delay  the  Senate  further  than  to  insist 
that  we  have  passed  a  wholesome  law,  a  law  that  will  confer  lasting  benefits 
upon  the  people  of  the  United  States,  and  that  we  would,  indeed,  create  a  pain- 
ful impression  abroad  if  this  mighty  Nation  should  surrender  the  control  of 
its  domestic  policies  at  the  suggestion  of  a  foreign  power.  That  we  never  can 
do  and  maintain  unimpaired  the  prestige  and  the  honor  and  the  glory  of  the 
Republic. 


FROM   SPEECH   OF   HON.    JAMES   B.    MANN,    OF    ILLINOIS,    IN   THE 
HOUSE  OF  REPRESENTATIVES,   JANUARY  28,    1913. 

Mr.  MANX.  Mr.  Chairman,  nearly  every  day  now  wTe  read  of  some  article 
or  some  speech  attacking  the  provision  in  the  Panama  Canal  bill  which  Congress 
passed  last  summer  in  regard  to  the  question  of  tolls,  and  particularly  that 
portion  of  the  law  which  exempted  coastwise  vessels  from  the  payment  of  tolls. 
I  do  not.  propose  to  take  very  much  time  on  the  subject.  It  seems  to  me  there 
is  a  concerted  effort  being  made  to  discredit  the  action  of  Congress.  Whether 
that  effort  proceeds  in  part  from  the  activity  of  the  transcontinental  railways 
whose  rates  of  fare  are  likely,  or  at  least  liable,  to  be  affected  seriously  by  the 
reduction  of  the  cost  of  carriage  by  water  I  do  not  undertake  at  this  time  to 
say,  but  I  read  the  other  day  a  published  statement  attempting  to  discredit 
the  action  of  Congress  by  the  assumption  that  when  that  bill  was  under  con- 
sideration in  the  House  and  in  the  Senate  there  were  no  Members  present  to 
speak  of,  and  those  who  were  here  were  worn  out  and  too  tired  to  think. 

I  quote  some  language  from  this  publication,  as  follows: 

We  must  all  realize  as  we  look  back  that  when  that  provision  was  adopted  the  Members 
of  both  Houses  were  much  exhausted  ;  we  were  weary  physically  and  mentally.  Such  dis- 
cussion as  there  was  was  to  empty  seats.  In  neither  House  of  Congress  during  the  period 
that  this  provision  was  under  discussion  could  there  be  found  more  than  a  scant  dozen  or 
two  of  Members. 

It  is  unnecessary  in  the  House,  so  far  as  the  membership  of  the  House  is 
concerned,  to  state  that  that  statement  is  without  foundation,  because  we 
all  remember  that  in  the  discussion  of  the  Panama  Canal  bill,  and  particularly 
of  the  Doremus  amendment  or  substitute  which  was  finally  agreed  to,  the 
membership  of  the  House  was  quite  generally  present ;  and  I  have  seldom  seen 
in  my  service  in  the  House  as  large  a  membership  of  the  House  present  when 
any  discussion  wras  being  carried  on. 

But  the  statement  that  only  a  scant  dozen  or  two  Members  of  the  House 
who  were  worn  out  is  an  assumption  that  the  action  of  the  House  was  without 
proper  consideration,  and  is  a  reflection  not  only  upon  the  House  but  the  action 
which  the  House  took. 

The  Doremus  amendment  or  substitute  for  section  5  of  the  Panama  Canal  bill 
was,  by  consent  of  the  House,  printed  in  the  Record  of  May  18.  It  was  dis- 
posed of  in  Committee  of  the  Whole  House  on  the  state  of  the  Union  on  May  21. 
It  was  disposed  of  in  the  House  itself  on  May  23 ;  and  May,  by  the  way,  was 
before  the  membership  of  the  House  was  tired  out,  if  they  were  tired  out  at  all, 
which  I  did  not  observe  during  the  session. 

Let  me  give  a  few  votes  which  were  taken  in  Committee  of  the  Whole  to  show 
whether  there  were  only  a  scant  dozen  or  two  Members  of  the  House  present 
during  the  discussion. 

On  the  Adamson  committee  amendment  there  was  a  division,  and  the  ayes 
were  83  and  the  noes  were  43. 

On  the  Adamson  amendment  to  the  Goldfogle  amendment,  on  the  same  section, 
the  ayes  were  52  and  the  noes  were  63. 

95272—12090 


14 

On  the  Sims  amendment  to  the  Goldfogle  amendment  the  ayes  were  44  and 
the  noes  were  60. 

On  the  Goldfogle  amendment  itself,  on  a  division,  the  ayes  were  33  and  the 
noes  were  80. 

T>n  the  Good  amendment  to  the  Doremus  substitute  the  ayes  were  24  and  the 
noes  were  99. 

On  the  Doremus  substitute,  on  a  division,  the  ayes  were  91  and  the  noes 
were  91 ;  and  on  tellers  being  ordered,  the  ayes  were  100  and  the  noes  were  90. 

On  the  final  vote  in  the  House  the  ayes  were  147  and  the  noes  were  128, 
"  present  "  8. 

Mr.  Chairman,  I  throw  this  into  the  RECORD  because  I  am  somewhat  tired  at 
some  of  the  statements  that  are  being  made  by  extremely  high  authority  for  the 
purpose  of  making  the  country  believe  that  that  provision  in  the  Panama  Canal 
bill  was  without  consideration  by  the  House,  and  that  action  was  taken  in  the 
absence  of  Members  of  the  House.  While  I  shall  not  quote  the  record  in  the 
Senate,  it  would  bear  analysis  very  much  to  the  same  effect. 

But,  Mr.  Chairman,  we  are  told  that  we  were  wrong  in  the  action  that  we 
took;  that  the  Panama  Canal  act  should  be  submitted  to  some  form  of  arbitra- 
tion. The  Hay-Pauncefote  treaty  is  given  as  the  basis  for  the  claim  that  we  do 
not  have  the  authority  to  exempt  our  coastwise  trade  from  the  payment  of  tolls 
through  this  canal,  and  that  claim  is  based  upon  paragraph  1,  article  3,  of  the 
Hay-Pauncefote  treaty.  That  paragraph  reads: 

The  canal  stall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  these  mles,  on  terms  of  entire  equality,  so  that  there  shall  bo  no  discrimination 
against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions  or  charges 
of  traffic,  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be  just  and  equitable. 

Paragraph  3  of  the  same  article  provides : 

Vessels  of  war  of  a  belligerent  shall  not  revictual  nor  take  any  stores  in  the  canal  except 
so  far  as  may  be  strictly  necessary,  and  the  transit  of  such  vessels  through  the  canal  shall 
be  effected  with  the  least  possible  delay  in  accordance  with  the  regulations  in  force,  and 
with  only  such  intermission  as  may  result  from  the  necessities  of  the  service. 

Paragraph  4  of  the  same  article  provides: 

No  belligerent  shall  embark  or  disembark  troops,  munitions  of  war,  or  warlike  materials 
in  the  canal,  except  in  case  of  accidental  hindrance  of  the  transit,  and  in  such  case  the 
transit  shall  be  resumed  with  all  possible  dispatch. 

Paragraph  5  of  the  same  article  provides: 

The  provisions  of  this  article  shall  apply  to  waters  adjacent  to  the  canal  within  3  miles 
of  either  end.  Vessels  of  war  of  a  belligerent  shall  not  remain  in  such  waters  longer 
than  24  hours  at  any  time,  except  in  case  of  distress,  and  in  such  case  shall  depart  aa 
soon  as  possible  ;  but  a  vessel  of  war  of  one  belligerent  shall  not  depart  witliin  24  hours 
from  the  departure  of  a  vessel  of  war  of  the  other  belligerent. 

Paragraph  1  reads: 

The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  war  of  all  nations — 

And  the  claim  is  made  that  that  puts  us  upon  the  same  terms  precisely  as  any 
other  nation.  If  that  be  true  as  to  merchant  marine,  it  is  also  true  as  to  vessels 
of  war.  There  is  no  distinction  in  the  treaty  in  that  paragraph  between  war 
vessels  and  merchant  vessels.  If  we  have  110  authority  under  the  provisions 
of  this  treaty  to  give  preference  to  our  merchant  marine,  then  we  have  no  au- 
thority to  give  preference  to  our  war  vessels;  and  if  this  treaty  applies  to  our 
merchant  marine,  it  also  applies  to  the  war  vessels ;  and  if  it  applies  to  the  war 
vessels,  if  we  happen  to  be  at  war  with  any  country,  then  we  can  not  keep  one 
of  our  war  vessels  anywhere  within  3  miles  of  either  end  of  the  canal  for  more 
than  24  hours  except  in  case  of  distress,  and  in  case  of  distress  the  vessel  must 
depart  as  soon  as  possible.  Do  we  propose  to  submit  to  arbitration  the  ques- 
tion of  whether  in  time  of  war  with  some  other  country  we  can  maintain  one 
of  our  warships  within  3  miles  of  either  end  of  the  canal?  Yet  it  is  perfectly 
plain  that  if  we  can  give  no  preference  to  the  merchant  marine  we  have  no  au- 
thority to  keep  a  war  vessel,  in  time  of  war  with  any  other  country,  within  3 
miles  of  either  end  of  the  canal. 

Mr.  Chairman,  to  a  certain  extent  we  gave  construction  to  the  Hay-Pauucefote 
treaty.  Shortly  after  the  Hay-Pauncefote  treaty  we  negotiated  a  treaty  with 
the  Republic  of  Colombia.  There  is  no  exception  in  the  Hay-Pauncefote  treaty 
95272—12090 


15 

as  to  Colombia,  and  in  that  treaty  which  we  negotiated  with  Colombia,  though 
it  never  was  ratified  by  the  Republic  of  Colombia,  it  is  provided  in  article  17 : 

The  Government  of  Colombia  shall  have  the  right  to  transport  over  the  canal  its  vessels, 
troops,  and  munitions  of  war  at  all  times  without  paying  charges  of  any  kind. 

If  the  provisions  of  the  treaty  apply  to  vessels  of  all  nations,  including  the 
United  States,  they  must  also  apply  to  the  Republic  of  Colombia,  and  yet  imme- 
diately after  we  had  negotiated  the  Hay-Pauncefote  treaty  we  negotiated  this 
treaty  with  Colombia.  Again,  we  negotiated  a  treaty  with  the  Republic  of 
Panama,  in  which  we  provided,  in  article  19 — 

That  tlw  Government  of  the  Republic  of  Panama  shall  have  the  right  to  transport  over 
the  canal  its  vessels  and  its  troops  and  munitions  of  war,  in  such  vessels  at  all  times, 
without  paying  charges  of  any  kind. 

That  treaty  is  in  force;  but  that  is  not  the  only  treaty  that  we  negotiated, 
go  distinguished  a  man  as  the  Hon.  Elihu  Root,  when  he  was  Secretary  of 
State,  negotiated  a  treaty  with  the  Republic  of  Panama,  and  another  with  the 
Republic  of  Colombia,  and  in  the  treaty  with  the  Republic  of  Colombia,  nego- 
tiated by  Secretary  of  State  Elihu  Root,  it  was  provided : 

The  Repiiblic  of  Colombia  shall  have  liberty  at  all  times  to  convey  through  the  ship 
canal  now  in  course  of  construction  by  the  United  States  across  the  Isthmus  of  Panama 
the  troops,  materials  for  war,  and  ships  of  war  of  the  Republic  of  Colombia  without  pay- 
ing any  duty  to  the  United  States,  even  in  the  case  of  an  international  war  between 
Colombia  and  another  country. 

Yet  it  is  reported  that  certain  gentlemen  of  high  authority  have  recently  de- 
clared that  under  the  Hay-Pauncefote  treaty  we  have  no  right  to  make  any 
discrimination  in  favor  of  ourselves,  much  less  the  Republic  of  Colombia. 
While  it  is  true  that  this  treaty  is  not  in  effect,  because  it  was  not  ratified  by 
the  Republic  of  Colombia,  yet  it  was  negotiated  by  our  Secretary  of  State  and 
ratified  and  approved  by  the  Senate  of  the  United  States.  [Applause.]  It  is 
not  our  fault  that  it  is  not  existing  law  as  a  treaty. 

Mr.  LONG  WORTH.  Mr.  Chairman,  was  any  protest  made  by  any  foreign  na- 
tion at  the  time  of  the  negotiation  of  any  of  these  treaties  to  which  the  gentle- 
man has  referred? 

Mr.  MANX.  There  was  no  protest  by  any  foreign  nation  at  the  time.  I  do 
not  think  that  any  foreign  nation  ever  dreamed  that  there  was  no  authority 
on  the  part  of  the  United  States  to  grant  the  preference  which  we  have  granted 
until  after  the  transcontinental  railroads  got  busy.  [Applause.] 


THE  RIGHT  OP  THE  UNITED  STATES  TO  EXEMPT  COASTWISE 
SHIPPING  FROM  THE  PAYMENT  OP  TOLLS.  INTERPRETATION 
GIVEN  TO  HAY-PAUNCEFOTE  TREATY  BY  SENATORS  PRESENT 
WHEN  INSTRUMENT  WAS  PENDING  BEFORE  THE  UNITED 
STATES  SENATE  AND  THE  BARD  AMENDMENT  WAS  OFFERED. 

[From  Congressional  Record,  July  17,  1912.] 

Mr.  LODGE.  Mr.  President,  some  time  ago  I  started  to  say  something  in 
regard  to  the  question  of  tolls  charged  on  vessels  passing  through  the  Panama 
Canal,  which  was  under  discussion  here  the  other  afternoon  when  I  was 
unfortunately  absent.  I  now  renew  the  attempt.  The  question  of  canal  tolls 
has  arisen  in  connection  with  representations  made  by  the  Government  of 
Great  Britain  in  regard  to  our  rights  in  fixing  tolls.  It  so  happened  that  I  was 
in  London  when  the  second  Hay-Pauncefote  treaty  was  made,  and,  although 
the  draft  was  sent  from  this  country,  that  treaty  was  really  made  in  London 
and  should  properly  be  cailed  the  Lansdowne-Choate  treaty.  I  mention  this 
merely  to  show  that  I  had  some  familiarity  with  the  formulation  as  well  as 
the  ratification  of  that  treaty.  When  the  treaty  was  submitted  by  the  Presi- 
dent to  the  Senate  it  so  happened  that  I  had  charge  of  it  and  reported  it  to 
the  Senate. 

The  second  Hay-Pauncefote  treaty,  as  Senators  will  remember,  embodied  in 
substance  the  amendments  which  the  Senate  had  made  to  the  first  Hay-Paurice- 
fote  treaty.  England  had  refused  to  accept  those  amendments  and  then  the 
second  treaty  was  made  embodying  in  principle  all  for  which  the  Senate  had 
contended. 

When  I  reported  that  treaty  my  own  impression  was  that  it  left  the  United 
States  in  complete  control  of  the  tolls  upon  its  own  vessels.  I  did  not  suppose 

05272—12090 


16 

then  that  there  was  any  limitation  put  upon  our  right  to  charge  such  tolls  as 
we  pleased  upon  our  own  vessels,  or  that  we  were  included  in  the  phrase  "  all 
nations." 

*  *  *  *  *  *  * 

Mr.  PAGE.  But  the  point  I  wish  to  raise,  and  especially  to  call  the  atten- 
tion of  the  Senator  from  New  York  to,  is  that  at  the  time  the  amendment  was 
being  considered  Mr.  Bard — who,  I  think,  was  then  a  Senator  from  California — 
moved  to  strike  out  article  3  and  substitute  the  following: 

ART.  III.  The  United  States  reserves  the  right  in  the  regulation  and  management  of 
the  canal  to  discriminate  in  respect  of  the  charges  of  traffic  in  favor  of  vessels  of  its  own 
citizens  engaged  in  the  coastwise  trade. 

This  amendment,  after  discussion  before  the  Senate  at  that  time,  was  voted 
down  by  a  vote  of  43  to  27.  In  the  discussion,  if  I  remember  correctly,  it 
appeared  that  if  we  had  not  done  this  we  could  not  have  made  the  treaty  with 
Great  Britain  at  that  time. 

Mr.  BRANDEGEE.  I  do  not  desire  to  intrude  upon  the  Senator's  time,  for 
I  know  he  is  in  a  hurry.  But  I  intended,  at  the  close  of  the  speech  of  the 
Senator  from  North  Dakota  [Mr.  MCCUMBEB],  to  call  the  attention  of  the 
senior  Senator  from  Georgia  to  page'  4  of  the  views  of  the  minority  in  the 
House  report  on  the  House  bill,  where  the  following  is  stated : 

With  further  reference  to  the  Bard  amendment,  we  have  been  granted  authority  to 
quote  from  a  letter  recently  written  by  Senator  Bard,  in  the  course  of  which  he  states  : 

"  When  my  amendment  was  under  consideration  it  was  generally  conceded  by  Senators 
that  even  without  that  specific  provision  the  rules  of  the  treaty  would  not  prevent:  our 
Government  from  treating  the  canal  as  part  of  our  coast  line,  and  consequently  could  not 
be  construed  as  a  restriction  of  our  interstate  commerce,  forbidding  the  discrimination  in 
charges  for  tolls  in  favor  of  our  coastwise  trade,  and  this  conviction  contributed  to  the 
defeat  of  the  amendment." 

He  states  there  that  "it  was  generally  conceded  by  Senators  that  even  with- 
out that  specific  provision  the  rules  of  the  treaty  would  not  prevent  our  Govern- 
ment from  treating  the  canal  as  part  of  our  coast  line." 

Mr.  O'GORMAN.  That  is  in  accord  with  the  recollection  of  the  Senator  from 
Massachusetts. 

*  #  *  $  ff  *  * 

Mr.  WORKS.  The  Senator  from  Connecticut  has  anticipated  what  I  was 
about  to  say  by  reading  from  the  records  a  statement  made  by  Senator  Bard 
with  respect  to  his  amendment  and  the  reason  why  it  was  voted  down. 

I  simply  wish  to  say  that  I  have  in  my  hand  the  original  letter  of  Senator 
Bard  making  that  statement — that  the  reason  for  voting  down  his  amendment 
was  that  it  was  generally  regarded  by  the  Senate  as  unnecessary,  and  that  that 
construction  should  be  placed  upon  the  treaty  irrespective  of  any  amendment  of 
that  kind. 

Mr.  CLAPP.     Will  the  Senator  yield  to  me  for  a  moment? 

Mr.  O'GORMAN.     Yes. 

Mr.  CLAPP.  In  answer  to  the  suggestions  of  the  Senator  from  Vermont  [Mr. 
PAGE],  I  will  say  that  I  think  it  was  quite  generally  understood  then  that  the 
reason  for  voting  down  the  proposition  to  authorize  the  fortification  in  express 
terms  was  that  under  the  treaty  we  had  the  right  to  fortify  without  that 
particular  provision.  I  know  I  was  here  at  the  time,  although  I  do  not  recall 
all  of  the  speeches.  But  while  some  of  us  voted  insisting  in  some  instances 
that  these  things  should  be  explicit  and  in  others  voting  with  the  majority  upon 
the  ground  that  they  were  covered  anyhow,  I  believe,  both  with  reference  to 
the  coastwise  trade  and  especially  with  reference  to  the  question  of  fortification, 
that  many  of  the  votes  cast  against  those  express  provisions  were  cast  upon 
the  theory  that  without  them  we  nevertheless  had  the  right  to  do  them. 

Mr.  O'GORMAN.     That  the  provisions  were  unnecessary? 
.    Mr.  CLAPP.     Yes;  that  they  were  unnecessary. 

[Prom  the  Congressional  Record,  July  20,  1912.] 

Mr.  LODGE.  While  I  am  on  my  feet,  if  the  Senator  will  allow  me,  there 
is  one  other  thing  I  should  like  to  say.  I  said  in  my  remarks  a  few  days  ago 
that  my  personal  view  was  that  we  had  the  right  to  exempt  American  vessels 
from  tolls.  I  did  not  go  into  the  mater.  I  took  a  somewhat  active  part  in  the 
two  Hay-Pauncefote  treaties,  as  they  are  called.  I  voted  against  the  Bard 
amendment.  I  voted  against  it  in  the  belief  that  it  was  unnecessary ;  that  the 
95272—12090 


17 


right  to  fix  tolls,  if  we  built  the  canal  or  it  was  built  under  our  auspices,  was 
undoubted.  I  know  that  was  the  view  taken  by  the  then  Senator  from  Minne- 
sota, Mr.  Davis,  who  was  at  that  time  chairman  of  the  committee.  I  certainly 
so  stated  on  the  floor.  *  *  *  I  had  that  same  view  in  regard  to  this  treaty. 
I  was  familiar  with  the  work  that  was  done  upon  it  in  London  at  the  time 
when  it  was  concluded  there  and  finally  agreed  to,  and  I  was  very  familiar  with 
it  here.  Although,  as  the  Senator  from  Georgia  correctly  said,  the  question  was 
not  raised  at  that  time,  I  personally  have  never  had  any  doubt  that  the  matter 
of  fixing  the  tolls  must  necessarily  be  within  our  jurisdiction;  and  when  I 
referred  to  our  going  to  The  Hague  as  useless  I  did  not  mean  because  our  case 
was  not  a  good  one.  I  meant  because  in  the  nature  of  things  we  could  by  no 
possibility  have  a  disinterested  tribunal  at  The  Hague.  It  would  be  for  the 
interest  of  every  other  nation  involved  to  prevent  our  fixing  the  tolls  according 
to  our  own  wishes. 

Mr.  POMERENE.     Mr.  President 

The  PRESIDENT  pro  tempore.  Does  the  Senator  from  South  Carolina  yield 
to  the  Senator  from  Ohio? 

Mr.  SMITH  of  South  Carolina.     I  yield. 

Mr.  POMERENE.  The  Senator  from  Massachusetts  has  just  expressed  a 
reason  for  his  vote  against  what  was  known  as  the  Bard  amendment.  Can  the 
Senator  inform  us  as  to  whether  that  was  the  general  sentiment  prevailing  at 
that  time  among  the  Senators? 

Mr.  LODGE.  I  can  only  say,  Mr.  President,  that  that  was  the  view  of  the 
chairman  of  the  Committee  on  Foreign  Relations,  and  it  was  my  view;  and, 
while  I  may  be  mistaken,  I  think  on  that  vote  the  majority  of  the  Senate  fol- 
lowed the  Committee  on  Foreign  Relations. 

Mr.  SMITH  of  South  Carolina.  As  I  understand,  the  vote  was  something  like 
27  to  43. 

Mr.  LODGE.     Yes. 

Mr.  SMITH  of  South  Carolina.  The  question  of  the  Bard  amendment,  to 
which  the  Senator  refers,  was  brought  up ;  and  on  account  of  its  being  in  execu- 
tive session,  and  the  debates  not  being  available,  I  was  unable  to  find  any 
record  showing  what  was  the  sentiment  in  that  respect. 

Mr.  LODGE.  There  is  no  record  that  will  show  that,  of  course ;  but  I  know- 
that  was  my  opinion  and  the  opinion  of  the  chairman  of  the  Committee"  on 
Foreign  Relations  at  the  time. 

******* 

[From  the  Congressional  Record,  Aug.  6,  1912.] 

Mr.  PERKINS.  I  wish  to  state  that  Senator  Davis,  of  Minnesota,  was  at 
that  time  chairman  of  the  Committee  on  Foreign  Relations.  He  was,  as  is 
conceded  by  all,  an  authority  on  international  law,  and  took  the  view  stated 
by  the  Senator  from  New  York  and  that  stated  by  the  Senator  from  Washing- 
ton. There  is  no  question  about  it,  that  the  rules  we  did  make  were  to  govern 
other  nations  than  ourselves. 

Mr.  JONES.  Mr.  President,  it  seems  to  me  it  woiild  be  a  great  reflection 
upon  the  intelligence  and  patriotism  of  Senators  who  voted  against  those  amend- 
ments to  accept  any  different  construction. 

s 

FROM     SPEECH    OF    HON.    HOKE    SMITH,    OF    GEORGIA,    IN    THE 
SENATE  OF  THE  UNITED  STATES  AUGUST   7,    1912. 

Mr.  SMITH  of  Georgia. 

******* 

I  think  we  may  .justly  insist — I  doubt  whether  it  would  be  successfully  con- 
troverted— that  so  far  as  our  coastwise  vessels  are  concerned  this  treaty  does 
not  apply  to  them.  Indeed,  in  the  communication  from  the  Attorney  General 
embodying  the  views  brought  to  our  attention  by  Great  Britain  it  is  stated  that 
upon  that  subject  with  proper  regulations  it  is  probable  that  no  question  by 
Great  Britain  would  be  made.  Now,  fortifying  that  view,  one  that  we  can 
logically  deduce  from  article  3,  section  1,  and  the  attitude  of  Great  Britain 
upon  it  with  the  decision  of  the  Supreme  Court  of  the  United  States  in  the 
Galveston  case,  in  which  they  held  in  effect  that  language  of  this  kind  was  not 
applicable  to  coastwise  vessels,  that  it  was  no  discrimination  under  language 
practically  similar  to  the  language  found  in  this  treaty  to  extend  privileges  to 

95272°— 12090 2 


18 

coastwise  vessels  that  were  net  extended  to  foreign  vessels,  we  can  sustain  the 
provision  freeing  coastwise  vessels  from  tolls. 

That  decision  squarely  sustains  the  position  that  the  treaty  does  not  apply  to 
coastwise  vessels. 

I  do  not  express  an  opinion  as  to  its  application  to  foreign  vessels.  *  *  * 
I  think,  however,  we  are  justified  in  the  conclusion,  especially  in  view  of  the 
further  fact  that  nearly  every  nation  handles  its  coastwise  business  exclusively 
in  vessels  of  its  own,  that  this  treaty  did  not  mean  to  apply  to  coastwise  vessels. 
The  language  used  expresses  no  discrimination  as  to  nations;  it  expresses  no 
discrimination  as  to  English  vessels  or  French  vessels  or  German  vessels;  it 
simply  declares  that  the  coastwise  vessels  may  pass  through  the  canal  free. 
Our  statutes,  like  the  laws  of  most  other  countries,  limit  the  coastwise  trade  to 
American  vessels.  I  think  we  can  safely  rely  upon  this  decision  and  the  con- 
struction to  justify  the  conclusion  that  we  do  not  invade  the  terms  of  the  treaty 
if  we  permit  coastwise  vessels  to  pass  through  the  canal  free.  I  apprehend  that 
no  possible  question  would  be  raised  upon  it,  unless  it  were  that  the  effect  under 
the  treaty  would  be  to  give  coastwise  vessels  of  Canada  and  British  America 
the  same  privilege. 

FROM  SPEECH  OF  HON.  JAMES  E.  MARTINE,  OF  NEW  JERSEY,  IN 
THE  SENATE  OF  THE  UNITED  STATES  JANUARY  23,    1913. 

Mr.  MARTINE  of  New  Jersey.  Mr.  President,  my  former  vote  on  the  ques- 
tion of  tolls  on  the  Panama  Canal  was  the  result  of  my  conscientious  and 
deliberate  judgment.  Notwithstanding  the  splendid  argument  of  the  senior 
Senator  from  New  York  [Mr.  ROOT],  I  am  frank  to  say  that  I  am  still  uncon- 
vinced of  any  wrong  or  injustice  in  my  position. 

Mr.  President,  I  feel  that  the  Senator  from  New  York  was  most  unfortunate 
in  that  part  of  his  remarks  where  he  referred,  at  least  by  innuendo,  to  those 
who  opposed  his  proposition  as  "  playing  to  the  galleries."  No,  Mr.  President ; 
higher  motives  prompted  my  vote  on  this  question.  I  yield  to  no  man  in  love 
and  admiration  for  the  lofty  sentiments  expressed  by  the  Senator  from  New 
York.  This,  however,  is  not  a  question  of  the  peace  of  the  world  nor  of  the 
honor  of  the  American  Nation,  but  it  is  a  question  of  right  and  justice  to  the 
American  people. 

The  Senator  from  New  York  asks,  "Are  we  Pharisees?"  No;  we  are  not 
Pharisees  nor  hypocrites,  but  a  brave  and  honorable  people  demanding  our 
rights.  It  seems  to  me  that  it  comes  with  ill  grace  for  Great  Britain  even  to 
suggest  bad  faith  on  our  part,  when  her  whole  history  has  been  that  of  greed 
and  avarice  in  dealing  with  the  nations  of  the  earth.  Read,  Mr.  President,  the 
story  of  Great  Britain's  occupancy  of  India  and  of  Egypt,  and  you  find  it  is  one 
long  story  of  commercialism  for  England,  right  or  wrong. 

The  Senator  calls  for  arbitration.  History  tells  us  that  Great  Britain's 
policy  has  been  to  arbitrate  only  with  nations  stronger  than  herself.  How  well 
I  recall  a  few  years  ago  when  that  Spartan  band,  the  Boers,  in  their  heroie 
contest  for  liberty,  prayed  and  pleaded  for  arbitration.  Humanity  the  world 
over  joined  in  that  plea ;  but  the  ear  of  Great  Britain  was  deaf  to  all  supplica- 
tions. Shall  we  arbitrate  this  question  of  our  right  to  regulate  the  canal  we 
have  built  and  paid  for?  No;  never. 

Mr.  President,  the  whole  question,  I  feel,  is  summed  up  in  this  editorial  from 
the  London  Times  of  recent  date : 

If  this  bill  becomes  a  law,  it  will  prove  a  little  short  of  disastrous  to  British  ship- 
owners. With  their  best  brains  and  energy  devoted  to  their  work,  the  United  States  will 
now  proceed  to  turn  out  vessels  on  a  wholesale  scale,  and,  aided  by  their  freedom  from 
Panama  Canal  tolls,  there  is  little  to  prevent  them  from  entering  with,  success  all  those 
trades  in  which  British  shipowners  are  now  the  principal  carriers. 

As  I  said  heretofore  when  this  question  was  before  this  body  for  considera- 
tion, I  now  repeat  that  I  favor  free  tolls  for  American  craft,  both  ocean  and 
coastwise,  and  desire  that  the  tolls  for  all  other  vessels  of  the  world  be  only 
sufficient  to  maintain  the  physical  condition  of  the  canal,  and  that  the  cost  and 
interest  thereon  shall  be  America's  contribution  to  the  world.  I  believe  that 
such  a  policy  on  the  part  of  this  Government  with  reference  to  the  Panama 
Canal  would  rehabilitate  our  merchant  marine,  and  that  in  a  few  years  we 
would  command  the  carrying  trade  of  this  hemisphere. 

Mr.  President,  I  stand  by  my  former  vote  on  this  question,  and  will  vote  "  no  " 
on  the  proposition  to  rescind  our  former  action. 

95272—12090 


19 

FROM  SPEECH  OF  HON.  JOHN  SHARP  WILLIAMS,  OP  MISSISSIPPI, 
IN  THE  SENATE  OP  THE  UNITED  STATES  AUGUST  7,    1912. 

Mr.  WILLIAMS.  Mr.  President,  I  shall  vote  for  the  exemption  of  the  coast- 
wise vessels  of  the  United  States,  but  I  hope  not  upon  the  grounds  laid  down  by 
the  Senator  from  Iowa  [Mr.  CUMMINS]  in  his  fourth  speech  upon  the  subject. 
I  shall  vote  for  the  exemption  of  the  coastwise  vessels  of  the  United  States  upon 
the  around  laid  down  by  the  Supreme  Court  of  the  United  States  in  Olsen 
against  Smith,  in  One  hundred  and  ninety-fifth  United  States,  that  ground  be- 
ing, in  short,  that  as  foreign  vessels  never  had  any  standing  in  the  coastwise 
trade  at  all,  any  provisions  with  regard  to  the  coastwise  trade  can  not  be  a  dis- 
crimination. It  is  clear  to  anybody  who  can  read  English  that,  whether  this 
treaty  ought  to  do  it  or  ought  not  to  do  it,  this  treaty  does  forbid  us  to  make 
any  discrimination.  The  Senator  from  Iowa  tells  us  that  other  powers  will 
make  discriminations  by  granting  their  vessels  rebates  equal  to  their  tolls. 
Whenever  they  do,  that  moment  we  have  the  right,  under  the  treaty  itself,  to 
put  ourselves  upon  a  ground  of  equality  with  them  by  making  an  equal  rebate. 

I  agree  with  the  Senator  that  if  we  have  no  right  to  make  a  direct  discrimi- 
nation we  have  no  right  to  make  an  indirect  discrimination  by  making  rebates: 
but  if  other  nations  do  it,  as  he  freely  predicts  that  they  will,  and  the  Senator 
from  Massachusetts  [Mr.  LODGE]  freely  predicts  that  they  will,  then  in  order 
to  reinaugurate  the  equality  itself,  which  is  the  object  of  the  treaty,  we  would 
have  the  right  to  do  it. 

******* 

I  shall  vote  to  exempt  coastwise  vessels  from  these  tolls,  because  I  think  we 
have  a  right  to  do  it.  I  think  the  principle  laid  down  by  the  Supreme  Court  is 
a  correct  principle  ill  municipal  and  in  international  law. 

******* 

I  stand  here,  as  I  shall  stand  always,  I  hope,  for  the  principle  that  the  judi- 
cial proceedings  which  have  been  instituted  between  man  and  man  under  gov- 
ernment shall  some  day  become  instituted  between  nation  and  nation  in  the 
entire  world.  I  am  willing  to  arbitrate  anything  except  the  life  of  the  Nation, 
the  independence  of  the  Nation,  because  self-preservation  is  the  first  law  of 
nature  with  a  nation  as  with  an  individual.  We  may  afford  to  differ,  I  think, 
as  to  whether  we  can,  without  discrimination  and  without  violation  of  this 
treaty,  exempt  coastwise  vessels;  and  I  share  the  opinion  of  the  Senator  from 
Iowa  that  we  may.  I  think  the  principle  laid  down  by  the  Supreme  Court  is 
sound  in  law  and  in  ethics,  and  would  be  so  held  by  any  self-respecting  inter- 
national tribunal  of  arbitration ;  but  to  serve  notice  upon  the  world  in  advance 
from  the  seat  of  a  Senator  of  the  United  States  that  we  would  go  to  war,  sacri- 
fice our  youths,  shed  men's  blood  and  women's  tears,  sacrifice  our  treasure, 
sacrifice  the  blood  and  the  treasure  of  other  nations  rather  than  to  submit  to 
arbitration  a  simple  little  question  about  dollars  and  cents  of  canal  tolls  is  a 
position  against  which  I  wish  to  protest. 


FROM   SPEECH  OF   HON.   JOHN  R.    THORNTON,   OF   LOUISIANA,   IN 
THE  SENATE  OF  THE  UNITED  STATES  AUGUST  6,   1912. 

Mr.  THORNTON.  Mr.  President,  as  a  member  of  the  Interoceanic  Canals 
Committee,  I  have  attended  all  of  its  21  sittings  on  this  subject  save  5,  and  on 
those  occasions  I  was  with  other  committees,  principally  that  on  Naval  Affairs, 
and  I  doubt  if  this  attendance  record  was  excelled  by  any  other  member  of  the 
committee  except  the  chairman,  and  I  have  closely  followed  the  discussion  in 
this  Chamber  from  the  beginning. 

I  wish  to  briefly  state  my  conclusions  on  two  important  matters  pertaining  to 
the  Panama  Canal  bill,  which  are  productive  of  great  diversity  of  opinion  in  the 
Senate,  viz :  First,  the  right  of  the  United  States  to  permit  the  free  use  of  the 
canal  to  any  ships  sailing  under  the  American  flag,  while  collecting  tolls  from 
the  ships  of  all  other  nations ;  and,  second,  whether  admitting  the  right  to  thus 
exempt  ships  sailing  under  her  own  flag,  it  would  comport  with  public  policy  to 
extend  this  privilege  to  all  such  ships. 

Able  arguments  in  favor  of  and  against  the  right  of  control  of  the  United 
States  in  this  matter  have  been  made  on  the  floor  of  this  Chamber  during  the 

95272—12090 


20 

discussion,  and  to  me  it  seems  wonderful  that  the  Hay-Pa uncefote  treaty,  the 
construction  of  which  has  produced  such  discordant  views,  a  document  treating 
of  matters  of-  such  great  interest  to  the  world  in  general  and  to  the  United 
States  in  particular,  should  have  been  so  drawn  that  different  Senators  seem 
compelled  to  look  at  it  from  such  different  angles  and  draw  diametrically 
opposite  conclusions  from  a  study  of  it. 

It  is  the  first  part  of  paragraph  1  of  article  3  which  is  the  bone  of  contention, 
if  I  may  be  pardoned  for  using  such  a  reference  to  it,  and  which  reads  as 
follows : 

The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  these  rules,  on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimination 
against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  to  the  conditions  or  charges 
of  traffic,  or  otherwise. 

It  is  contended  by  some  that  this  language  includes  the  United  States  in  the 
term  "  all  nations,"  and  hence  precludes  her  from  extending  favors  to  her  own 
citizens  or  commerce  not  extended  to  the  citizens  or  commerce  of  other  countries, 
while  others  maintain  that  the  term  "all  nations"  necessarily  means  all  other 
nations,  and  does  not  preclude  us  from  favoring  our  own  people,  but  only  binds 
us  to  deal  impartially  with  all  other  people. 

As  for  myself,  I  had  no  difficulty  in  reaching  the  conclusion  that  the  United 
States  had  under  the  terms  of  the  treaty  the  undoubted  right  to  exempt  from 
the  payment  of  tolls  all  American  vessels  engaged  in  the  coastwise  trade. 

It  is  a  well-known  legal  rule  that  in  the  interpretation  of  a  statute  its  context 
must  be  studied  and  the  spirit  and  object  of  the  law  sought  for. 

We  see  in  the  first  part  of  the  disputed  paragraph  that  the  canal  shall  be  free 
and  open  to  the  vessels  of  all  nations  on  terms  of  entire  equality ;  but  we  also 
see  in  the  second  part  of  the  same  paragraph  that  the  end  sought  to  be  accom- 
plished by  this  first  part,  the  spirit  and  object  of  the  law,  as  it  were,  is  that 
there  shall  be  no  discrimination  against  any  nation. 

Now,  it  is  well  known  that  at  the  time  of  this  treaty  the  ships  of  no  other 
nation  were  permitted  to  do  business  in  the  coastwise  trade  of  the  United  States, 
and  that  is  the  law  still,  and  certainly  it  can  not  be  abrogated  by  this  treaty. 

It  follows  then,  that  as  no  foreign  ship  can  operate  in  our  coastwise  trade  and 
compete  with  us  in  that  trade  we  are  not  discriminating  against  such  ships  by 
allowing  to  our  own  coastwise  ships  the  free  use  of  the  canal. 

These  were  the  views  I  expressed  in  the  committee  sessions,  as  will  appear  by 
the  printed  report  of  the  proceedings,  and  I  voted  in  accordance  with  them. 


FROM  SPEECH  OF  HON.  WILLIAM  SULZER,  OF  NEW  YORK,  IN  THE 
HOUSE  OF  REPRESENTATIVES  MAY  21,    1912. 

Mr.  SULZER.  Mr.  Chairman,  I  am  an  American,  and  I  am  in  favor  of 
American  ships — flying  the  American  flag — going  through  the  American  canal 
free  of  charge.  Hence  I  shall  vote  for  free  tolls  for  all  ships  flying  the  flag  of 
my  country. 

I  want  to  do  something  to  aid  the  American  merchant  marine,  and  free  tolls 
for  our  own  ships  will  go  far  to  accomplish  what  patriotic  America  hopes  to  see 
accomplished  ere  we  adjourn. 

We  all  realize  that  there  is  a  sentiment,  growing  stronger  and  stronger  every 
day,  throughout  the  country  in  favor  of  doing  something  to  rehabilitate  our 
merchant  marine.  This  is  patriotic,  eminently  proper,  and  should  be  encour- 
aged by  every  true  American. 

There  is  no  man  in  this  country  more  anxious  and  more  willing  to  enact 
proper  legislation  to  restore  the  American  merchant  marine  than  myself,  but 
I  want  to  do  it  honestly ;  I  want  to  do  it  along  constitutional  lines ;  and  I  want 
to  do  it  in  harmony  with  that  fundamental  principle  of  equal  rights  to  all  and 
special  privileges  to  none. 

****** 

In  this  connection  I  must  take  exception  to  the  remarks  of  the  gentleman 
from  Minnesota  [Mr.  STEVENS]  regarding  the  construction  of  the  Hay-Pa unce- 
fote  treaty  I  stand  here  as  chairman  of  the  Committee  on  Foreign  Affairs  of 
this  House,  having  given  careful  study  to  that  treaty,  and  to  every  circumstance 
connected  with  it,  and  I  speak  advisedly,  and  for  our  distinguished  Secretary  of 
95272—12090 


21 

State,  when  I  say  to  this  House  that  there  is  not  a  line  in  that  treaty  that  pre- 
cludes the  Government  of  the  United  States  from  permitting  our  own  ships 
going  through  the  Panama  Canal  free' of  tolls.  [Applause.] 

If  you  want  to  bring  about  a  situation  such  as  the  gentleman  from  Georgia 
[Mr.  ADAMSON]  has  mentioned;  if  you  want  to  get  this  matter  into  The  Hague 
Tribunal;  if  you  want  to  invite  a  lawsuit,  then  pass  this  bill  precluding  the 
ships  of  the  United  States  from  going  through  our  own  canal  free.  That  may 
foreclose  our  rights  in  the  future.  That  may  cast  a  doubt  upon  our  construc- 
tion of  this  treaty,  and  at  some  future  time  involve  the  Government  of  the 
United  States  in  a  controversy  of  international  importance  regarding  our  rights 
to  grant  preferences  to  our  own  ships  using  our  own  canal  which  the  people  of 
this  country  have  paid  for  and  have  built.  I  am  opposed  to  any  legislation 
that  will  bring  about  such  a  contingency.  To  me  the  treaty  is  clear  and  plain. 
I  am  opposed  now  to  bringing  this  treaty  into  the  realm  of  dispute.  I  ani 
opposed  to  inviting  at  some  future  time  an  international  lawTsuit.  In  my  judg- 
ment the  only  way  that  we  can  prevent  that  is  for  the  representatives  of  the 
American  people  to  stand  up  here  and  vote  in  favor  of  American  ships  going 
through  the  canal  free  of  tolls.  [Applause.] 


FROM  SPEECH  OF  HON.   FRANCIS  G.   NEWLANDS,   OF  NEVADA,   IX 
THE  SENATE  OF  THE  UNITED  STATES  JANUARY  22,   1913. 

Mr.  XEWLANDS.  Mr.  President,  after  over  half  a  century  of  diplomatic 
negotiation,  of  engineering  investigation,  and  of  financial  negotiation,  the  Pan- 
ama Canal  is  approaching  completion,  and  within  a  year  will  be  open  to  the 
ships  of  the  world.  It  is  estimated  that  of  the  tonnage  passing  through  that 
canal  about  nine-tenths  will  be  international  tonnage  and  that  about  one- 
tenth  wrill  be  domestic  tonnage  in  the  coastwise  trade.  Therefore  the  immediate 
benefit  of  this  enormous  enterprise,  involving  an  expenditure  upon  the  part  of 
the  United  States  of  $400,000.000,  will  be  enjoyed  by  foreign  countries  to  the 
extent  of  nine-tenths  and  by  the  United  States  to  the  extent  of  one-tenth. 

In  the-passage  of  the  act  relating 'to  the  operation  and  maintenance  of  this 
canal  Congress,  pursuing  its  traditional  policy  of  maintaining  an  untramineled, 
an  unburdened,  and  an  unfettered  domestic  waterway  transportation,  and  re- 
garding the  Panama  Canal,  in  addition  to  its  international  use,  as  a  great  do- 
mestic waterway  connecting  the  wraterway  systems  of  the  two  coasts  and  enabling 
free  communication  by  water  between  them,  declared  that  no  tolls  should  be 
levied  upon  ships  passing  through  the  canal  engaged  in  the  coastwise  trade  of 
the  United  States. 

England,  under  the  inspiration  of  Canada — that  inspiration  doubtless  quick- 
ened by  the  action  of  the  transcontinental  Canadian  railroad,  whose  action 
in  turn  was  quickened  by  that  of  American  transcontinental  railroads — pro- 
tests -against  this  declaration  that  no  tolls  shall  be  levied  upon  ships  in  the 
coastwise  trade  as  a  violation  of  the  rule  of  equality  fixed  by  solemn  treaty 
between  England  and  the  United  States. 

*  *  ***** 

Mr.  President,  why  was  it  that  we  declared  in  the  act  that  no  tolls  should 
be  levied  upon  ships  engaged  in  our  coastwise  trade?  We  did  it,  first,  because 
we  had  imposed  upon  international  tonnage  very  much  less  than  a  fair  pro- 
portionate charge  of  our  cost  of  operation,  maintenance,  and  interest,  and 
therefore,  in  justice  to  domestic  commerce,  we  could  exempt  American  ships. 
We  did  it,  further,  in  pursuance  of  the  traditional  policy  of  the  United  States, 
which  demanded,  so  far  as  our  domestic  waterways  are  concerned,  that  our 
rivers  should  be  improved,  our  lakes  developed,  our  canals  constructed  at  the 
expense  of  the  National  Treasury,  and  without  imposing  a  dollar  of  burden 
upon  the  commerce  of  the  country. 

Was  it  to  be  expected  that  the  United  States,  having  pursued  this  tradi- 
tional policy  for  over  a  century,  should,  when  it  was  assuming  the  position 
of  a  benefactor  to  the  commerce  of  the  world,  abandon  it  and  substitute  for  an 
unfettered  and  unburdened  domestic  commerce  a  fettered  and  a  burdened  com- 
merce? 

Now,  Mr.  President,  what  is  the  occasion  of  this  difficulty?  What  has  been 
the  difficulty  all  the  way  through  with  reference  to  the  Panama  Canal?  Our 
difficulty  has  always  been  the  opposition  of  the  transcontinental  railway  car- 
95272 — 12090 


22 

riers  of  the  country,  determined,  first,  to  prevent  interoceanic  communication 
and  then  to  paralyze  it  by  the  burdens  imposed  upon  it.  It  way  for  this  reason 
that  for  years  they  prevented  and  delayed  the  inauguration  of  the  canal  enter- 
prise, and  that,  later  on,  as  its  completion  approached,  they  sought  to  induce 
us  to  permit  ships  owned  by  transcontinental  railroads  to  traverse  the  canal, 
knowing  very  well  from  past  experience  that  through  their  ownership  of  ships 
subsidized  by  the  profits  from  the  rail  traffic  they  could  paralyze  water  trans- 
portation. Then,  having  failed  in  that,  they  were  eager  to  have  us  impose  a 
burden  upon  the  domestic  transportation  between  the  two  coasts  in  the  shape  of 
tolls,  such  burdens  as  all  the  other  waterway  transportation  of  the  country  is 
entirely  free  from. 

Having  failed  to  influence  and  control  our  legislation,  they  then  sought 
their  brother  carrier  to  the  north  in  Canada,  a  transcontinental  railway  running 
from  ocean  to  ocean  and  interested  with  the  transcontinental  railroads  of  the 
"United  States  in  monopolizing  transportation  between  the  two  oceans  and  in 
paralyzing  the  canal.  They  sought  to  make  that  railroad  the  instrumentality 
of  foreign  interference,  and  through  it  they  appealed  to  its  sovereign  country — 
Great  Britain — to  protest  against  this  action  as  a  discrimination  against  for- 
eign commerce  in  violation  of  the  terms  of  the  Hay-Pauncefote  treaty. 

*****  *  * 

All  that  foregn  nations  have  the  right  to  insist  upon  is  not  that  we  should 
allow  them  to  control  our  domestic  policy,  but  that  in  carrying  out  the  domestic 
policy,  which  involves  levying  no  tolls  upon  domestic  ships,  we  should  see  to  it 
that  the  tolls  remitted  are  not  imposed  as  an  additional  charge  upon  the  ships 
of  foreign  nations.  That  is  all  the  right  which  they  have  either  in  morals  or 
under  treaty  obligations. 

*  *  *  *  *        .  *  * 

»  Shall  we,  simply  because  the  Canadian  transcontinental  railway  has  united 
with  the  American  transcontinental  railways  to  secure  foreign  intervention  in 
order  to  secure  them  a  monopoly  of  the  transportation  of  the  country  and  in 
order  to  enable  them  to  paralyze  the  Panama  Canal  as  an  instrumentality  of 
commerce,  shall  we  meekly  yield  to  this  demand — this  demand  not  based  upon 
justice  or  equity — that  we  should  abandon  our  traditional  domestic  policy  of  a 
free  and  unfettered  domestic  commerce?  Will  we  not  discharge  every  obliga- 
tion to  the  nations  of  the  world  and  will  we  not  further  increase  their  obliga- 
tions to  us  by  declaring  that  all  the  tolls  remittee!  to  domestic  ships  shall  be 
credited  upon  the  interest  charge  of  the  United  States  against  the  nations  of 
the  world  for  the  construction  and  conduct  of  this  gigantic  enterprise? 

Mr.  President,  I  contend  that  the  whole  history  of  this  transaction  furnishes 
convincing  proof,  not  of  the  desire  of  this  Nation  to  oppressively  burthen  inter- 
national tonnage  passing  through  the  canal,  but  of  a  just  and  generous  spirit— 
a  spirit  which  recognizes  our  obligations  as  an  international  trustee  without 
contention  for  domestic  advantage.  No  unjust  burthen  has  been  placed  by  its 
action  upon  foreign  nations.  On  the  contrary,  our  Nation  is  to-day  bearing,  and 
will  for  many  years  continue  to  bear,  a  disproportionate  part  of  the  burthen  of 
this  great  international  enterprise.  Having  only  one-tenth  of  the  tonnage  car- 
ried through  the  canal,  it  will  for  a  long  time  bear  at  least  two-thirds  of  the 
charges  for  operation,  maintenance,  and  interest,  and  against  this  charge  it 
will  receive  only  a  paltry  credit  of  the  tolls  which  it  might,  if  it  saw  fit,  impose 
upon  domestic  ships  engaged  in  the  coastwise  trade,  but  which,  in  pursuance  of 
a  traditional  policy  of  unrestricted  domestic  waterways,  it  proposes  to  remit. 
Such  remittance  imposes  no  inequality  or  injustice  upon  foreign  nations.  Such 
nations  can  easily  pay  into  the  canal  fund  the  tolls  imposed  upon  their  ships. 
if  they  see  fit,  and  those  tolls,  will  be  righteously  adjusted  whether  they  be 
paid  by  the  ships  themselves  or  by  the  nations  whose  flags  they  bear. 

******* 

Confident  of  the  justice  of  our  position,  let  us  adhere  to  our  time-honored 
policy  of  an  unburthened  domestic  commerce,  at  the  same  time  seeing  to  it  that 
an  accurate  account  be  kept  of  our  domestic  tonnage  through  the  canal  and  that 
a  proportionate  charge  on  this  account  be  credited  upon  our  interest  charge 
against  the  canal  enterprise.  Thus  no  disproportionate  charge  will  be  made 
against  international  tonnage  and  the  burthens  of  the  canal  will  be  propor- 
tionately distributed  among  the  nations  using  it. 
95272 — 12090 


23 

FROM  SPEECH  OF  HON.  JOSEPH  G.  CANNON,  OF  ILLINOIS,  IN  THE 
HOUSE  OF  REPRESENTATIVES  MAY   18,    1912. 

Mr.  CANNON.  Mr.  Chairman,  I  shall  not  undertake  to  discuss  how  far  we 
may  go  under  the  treaty  in  saying  that  in  the  coastwise  trade  all  ships  flying 
the  American  flag  may  pass  through  the  canal  without  the  payment  of  toll. 
I  quite  agree  with  the  gentleman,  my  colleague  [Mr.  MANN],  touching  the 
construction  of  that  treaty,  and  I  am  gratified  that  I  had  the  pleasure  of  listen- 
ing to  his  remarks  and  that  the  House  also  had  an  opportunity  of  hearing  his 
Views. 

******* 

Now,  there  is  a  cleavage  between  the  gentleman  from  California,  Representa- 
tive KNOWLAND,  and  the  gentleman  from  Minnesota,  Representative  STEVENS. 
They  agree  in  some  respects  and  in  others  they  disagree.  I  listened  with  great 
pleasure  yesterday  to  the  gentleman  from  Minnesota  [Mr.  STEVENS]  make  one 
of  the  most  admirable  speeches  that  I  have  ever  heard  in  the  House,  but  after 
all  it  seemed  to  me  that  the  speech  rested  upon  a  shadow  for  a  foundation. 
And  what  a  magnificent  building  he  did  build  considering  the  foundation. 
[Laughter  and  applause.]  Ours  is  a  representative  Government.  We  all  re- 
spond to  public  sentiment  and  the  interests  primarily  of  our  constituency. 
Therefore  I  can  see  how  the  gentleman  who  represents  St.  Paul,  Minn. — and 
it  is  ably  and  patriotically  represented — would  hold  a  different  view  as  to  the 
real  or  supposed  interest  of  the  gentleman  who  represents  the  Golden  Gate  than 
is  held  by  that  gentleman  himself.  The  gentleman  who  represents  the  Golden 
Gate  ably  and  interestingly  insists  that  the  coastwise  trade  of  the  United  States 
is  barred  to  all  the  flags  of  all  the  world ;  that  we  own  the  Panama  Canal  and 
that  the  people  on  the  Pacific  coast  are  interested  in  having  coastwise  trade 
pass  through  that  canal  without  the  payment  of  tolls. 

I  was  greatly  interested  and  I  applauded  when  he  said  that  the  waterways  of 
the  great  Republic  were  without  toll  for  American  ships  in  the  coastwise  trade 
and  interstate-commerce  trade.  I  was  aware  that  that  was  the  case,  and  I  am 
glad  it  is.  They  will  always  be  free  so  far  as  my  vote  is  concerned.  I  followed 
him  when  he  spoke  about  the  dollar  a  ton  that  this  bill  would  levy  on  our  ships 
passing  through  the  canal,  and  the  burden  that  would  impose  on  that  part  of 
our  interstate  trade  which  will  go  by  water  from  Cairo,  from  the  upper  Missis- 
sippi River,  and  from  the  Ohio  down  to  the  Gulf,  and  in  fullness  of  time  pass 
through  the  canal  and  to  the  Pacific  coast,  and  how  that  additional  burden,  if 
imposed,  would  protect  the  transcontinental  railways  which  run  through  the 
district  represented  so  ably  by  the  gentleman  from  Minnesota  [Mr.  STEVENS]. 
That  is  to  say,  that  in  the  competition  with  the  transcontinental  railways  that 
dollar  a  ton  on.  water-borne  commerce  would  cut  some  figure  that  would  affect 
all  the  interstate  commerce  of  this  great  country. 

Do  gentlemen  stop  to  think  that  this  great  country — I  have  frequently  made 
this  statement,  but  I  am  apt  to  make  it  again — has  an  annual  production  of 
thirty  thousand  millions  of  dollars,  more  than  90  per  cent  of  which  is  consumed 
and  goes  to  market  by  water  and  by  railway  in  the  United  States?  Out  of 
that  thirty  thousand  million  dollars'  worth  of  products  only  two  thousand 
million  dollars'  worth  goes  to  foreign  markets.  We  produce  in  the  United 
States  more  than  one-third  of  all  the  products  of  all  the  civilized  world;  and 
when  you  put  an  exceptional  burden  of  a  dollar  a  ton  on  the  coastwise  trade 
it  affects  every  ton  substantially  that  goes  into  our  internal  commerce,  whether 
it  goes  by  rail  or  by  water.  [Applause.] 

I  have  been  amused  at  the  majority  report.  It  is  an  able  report,  ably  de- 
fended by  the  distinguished  chairman  of  that  great  committee  [Mr.  ADAM  SON], 
Smiling  Jim,  whose  ability  is  greater  than  he  knows.  [Applause.]  I  listened 
to  his  speech  with  great  pleasure;  but,  bless  my  soul,  he  says  that  under  the 
treaty  you  can  not  let  our  coastwise  trade  go  through  our  canal  without  pay- 
ment of  toll.  Oh,  no,  gentlemen  say,  that  would  be  a  violation  of  the  equality 
provision  of  the  treaty.  Then  in  the  next  breath  they  say,  "  Yes,  yon  must  make 
our  ships  pay  tolls,  and  then  you  can  legislate  the  money  back  to  them  by  way 
of  a  rebate."  But  wTheu  you  come  to  that  legislation,  here  comes  old  Subsidy. 
[Laughter.]  It  reminds  me  of  the  old  chestnut  about  the  doctor  throwing  his 
patient  into  fits  and  then  curing  the  fits.  The  gentleman  from  Georgia  throws  the 
House  into  a  subsidy  fit.  He  knows  how  one  shall  put  10,000  to  flight,  and  that 
if  you  cry  "  subsidy  "  many  will  run. 
95272—12090 


24 

But  that  argument  has  been  substantially  answered.  If  it  is  a  subsidy  in  this 
case,  it  is  a  subsidy  in  the  case  of  that  great  commerce  which  passes  through  the 
Soo  Canal,  which  some  one  has  said  is  of  greater  tonnage  than  all  the  foreign 
commerce  of  the  world.  I  do  not  know  whether  that  is  true  or  not. 

*  *  *  *  *  *  # 

I  am  not  afraid  of  subsidy.  I  would  subsidize  our  foreign  tonnage  if  I  thought 
we  could  do  it  successfully.  The  practical  difficulty  is  this :  If  without  a  cent 
of  expense  to  us  for  their  construction  ships  were  given  to  us  to  sail  under  the 
American  flag,  how  long  could  we  run  them,  when  it  costs  twice  as  much  to 
run  an  American  vessel  as  it  costs  our  foreign  competitors  for  similar  service 
on  the  great  highway  of  the  ocean?  Still  I  am  willing  to  venture  along  the 
coast  of  South  America,  as  that  is  near  by,  and  the  Panama  Canal  is  to  be 
opened.  I  would  even,  aliunde  this  legislation,  give  a  subsidy  to  ships  engaged 
in  that  trade;  but  we  monopolize,  of  course,  our  coastwise  trade,  in  which  a 
great  and  growing  tonnage  is  employed  and  will  continue  to  be  employed.  It 
is  pretty  important  that  we  have  somewhere  ships  upon  the  sea  that  will  train 
the  seamen  who  in  the  event  of  trouble  can  man  our  battleships.  Therefore,  as 
we  are  supreme  concerning  our  own  coastwise  trade,  it  is  important  that  it 
should  be  maintained  as  it  is,  and  not  burdened,  because  it  gives  enough  employ- 
ment in  large  part  to  beget  the  construction  of  ships  at  our  shipyards.  It  is 
necessary  for  us  to  have  shipyards,  and,  thank  God,  we  have  them.  I  am  a 
friend  of  the  coastwise  trade,  and  from  the  standpoint  of  a  great  public  policy, 
touching  the  building  of  ships,  touching  the  commerce  in  our  coastwise  trade, 
I  will  not  vote  to  burden  it  as  has  been  suggested  by  niy  friend  [Mr.  STEVENS  of 
Minnesota],  whose  outlook,  as  it  seems  to  me,  is  a  little  narrower  than  the  one 
I  happen  to  have  now.  I  think  very  likely  if  I  lived  at  St.  Paul  I  might  have 
the  same  sentiment,  even  if  I  could  not  build  so  magnificent  a  foundation  upon 
a  shadow  as  my  friend  did.  I  do  not  believe  this  House  of  Representatives  will 
do  otherwise  than  let  ships  engaged  in  our  coastwise  trade  go  through  the 
Panama  Canal  as  they  go  into  the  harbors  of  New  .York  and  San  Francisco  and 
upon  the  Sound  and  into  New  Orleans  and  into  all  our  seacoast  harbors,  free — 
without  tax.  That  is  only  simple  justice  and  sound  public  policy.  [Applause.] 


FROM   SPEECH   OF    HON.    HENRY   A.    COOPER,    OP   WISCONSIN,    IN 
THE  HOUSE  OF  REPRESENTATIVES  MAY  21,   1913. 

Mr.  COOPER.  Mr.  Chairman,  I  have  been  very  much  entertained  to-day  in 
observing  the  vigor  and  frequency  with  which  the  word  "  subsidy  "  is  being  used 
here  in  an  attempt  to  frighten  gentlemen  who  believe  that  coastwise  traffic  in 
American  ships  through  the  Panama  Canal  ought  to  be  free.  Gentlemen  shout 
"  Subsidy  !  "  "  Subsidy  !  "  at  those  of  us  opposed  to  tolls  on  coastwise  traffic.  As 
for  myself,  I  have  outgrown  the  age  when  a  mere  epithet  has  any  terrors. 
"  Subsidy!  "  There  is  no  more  of  subsidy  in  letting  American  coastwise  ships 
go  through  that  canal  free  than  there  is  to  letting  them  go  from  port  to  port 
down  the  Mississippi  River  free,  the  Government  having  expended  approximately 
$120,000,000  upon  that  river  for  improvements,  and  now  expending  annually 
$1,000,000  in  appropriations  for  maintenance.  [Applause.] 

Wherein  is  there  any  distinction?  If  there  be  any  distinction,  let  gentlemen 
point  it  out.  Is  it  a  subsidy  to  allow  coastwise  ships  to  go  through  the  Soo 
Canal  free  or  to  enter  New  York  Harbor  free  or  to  go  down  the  Ohio  River  free? 
This  word  "  subsidy  "  has  been  used  for  over  a  hundred  years  in  this  country 
by  those  opposed  to  any  Government  system  of  internal  improvements,  and  espe- 
cially to  improvements  of  rivers  and  harbors. 

It  is  the  very  argument  that  confronted  Henry  Clay  and  Andrew  Jackson 
find  other  statesmen  who  believed  with  them  that,  on  grounds  of  high  public 
policy,  this  Government  has  the  right  to  improve  the  waterways  of  the  country, 
not  because  such  improvement  is  for  the  benefit  of  any  particular  class  of  our 
citizens  but  because  it  cheapens  transportation  to  all  the  people  and  so  is  for 
the  good  of  all  the  people.  [Applause.] 

Let  any  gentleman  on  this  floor  who  says  that  we  are  "  subsidy  "  men  dis- 
tingush  between  boats  going  free  of  tolls  down  the  Mississippi  from  St.  Paul  to 
St.  Louis  or  Memphis  or  New  Orleans  and  letting  them  go  free  of  tolls  from 
New  Orleans  through  the  canal  to  San  Francisco  or  Seattle.  That  canal  is 
about  40  miles  long.  Suppose  that  it  were  cut  through  a  range  of  hills  40  miles 

95272—12090 


25 

wide  in  Iowa.  What,  then,  would  he  thought  of  a  proposition  to  charge  tolls, 
amounting  to  a  tariff  wall  between  different  sections  of  this  Republic?  I  am  for 
protection  against  the  poorly  paid  labor  of  China  and  the  underpaid  labor  of 
other  countries,  but  I  am  for  absolute  free  trade  between  every  part  of  the 
Atlantic  and  the  Pacific  coast  line  of  the  Republic  of  the  United  States.  [Ap- 
plause.] 

Putting  tolls  of  $10,000  or  $12,000  upon  an  American  ship  carrying  American 
goods  under  the  American  flag  going  through  that  American  canal  is,  in  effect, 
only  putting  $10,000  or  $12,000  of  tariff  upon  the  goods.  You  Democrats  are 
accustomed  to  declare  that  the  amount  of  a  tariff  on  goods  from  Europe,  if  col- 
lected at  New  York,  is  added  to  the  price  of  the  goods.  Is  it  not  added  to  the 
price  of  the  goods  if  collected  at  the  Panama  Canal  on  a  ship  going  from  New 
York  or  New  Orleans  to  California?  How  do  you  Democrats  answer  that  ques- 
tion? How  do  Republicans  answer  it — men  who  have  always  demanded  free 
trade  between  the  States? 

The  argument  made  here  about  subsidy  was  one  of  the  arguments  used  by 
friends  of  the  transcontinental  railroads  during  the  first  terms  of  my  service 
in  this  House  to  defeat  every  effort  in  Congress  to  provide  for  a  canal  to  con- 
nect the  Atlantic  and  Pacific  Oceans  through  the  Isthmus.  And,  Mr.  Chairman, 
we  have  been  told  here  of  the  great  work  of  these  railroad  companies  and  of 
the  great  amount  wrhich  their  officers  invested  in  building  them  across  the  conti- 
nent. We  have  heard  of  this  for  many  years.  And  yet  it  is  a  fact  that  none  of 
those  men  really  contributed  $1  to  build  either  the  Central  or  the  Union  Pacific 
roads. 

The  Government  gave  the  Central  Pacific  $48,000  a  mile  over  the  mountains, 
$32,000  a  mile  for  other  portions,  and  $20,000  a  mile  for  all  of  it.  The  Patterson 
commission  of  1887  reported  that  the  cost  was  only  $22,500  a  mile.  These  sums 
per  mile  all  came  from  the  Government. 

Then  the  Government  allowed  them  to  issue  first-morgage  bonds  on  the  Gov- 
ernment laud  grants  to  the  roads  equal  to  the  total  amount  which  the  Govern- 
ment itself  gave  them  through  its  own  bonds.  Gov.  Stanford  himself  admitted 
that  they  had  enough  money  from  their  own  bonds  and  the  Government  bonds 
to  pay  for  their  railroads.  The  commission  of  1887  made  an  investigation  and 
reported  that  the  proceeds  of  the  Government  bonds  and  of  the  first-mortgage 
bonds  on  the  land  grants  supplied  every  dollar  spent  on  the  Central  Pacific. 
The  same  is  substantially  true  also  of  the  Union  Pacific. 

Nobody  wishes  to  do  these  roads  any  harm,  Mr.  Chairman ;  I  have  taken  time 
simply  to  call  attention  to  the  facts  about  the  alleged  investments  of  their 
officers.  [Applause.] 

I  have  three  times  voted  against  ship  subsidies.  But  the  proposition  before 
us  is  not  one  of  that  character. 

FROM  SPEECH  OF  HOX.  WILLIAM  P.   BORLAND,   OF  MISSOURI,   IN 
THE  HOUSE  OF  REPRESENTATIVES  MAY   17,   1912. 

Mr.  BORLAND.  Mr.  Chairman,  we  have  had  in  the  brief  discussion  on  this 
bill  the  most  brilliant  argument,  the  most  learned  debate  that  it  has  been  my 
fortune  to  listen  to  in  this  .House ;  some  of  the  most  masterly  speeches,  replete 
with  information  and  erudition.  The  speech  to-day  of  the  gentleman  from  Wis- 
consin [Mr.  ESCH]  was  a  remarkable  presentation  of  facts  governing  the  move- 
ment of  the  great  commerce  in  the  civilized  world.  Scarcely  a  factor  that 
enters  into  the  movement  of  that  commerce  and  the  channels  which  it  will  seek, 
or  ought  to  seek,  seems  to  have  been  omitted  by  him  in  his  wonderful  grasp  of 
the  subject.  But  in  all  of  that  remarkable  address,  which  showed  how  the 
Panama  Canal  could  be  made  of  permanent  usefulness  to  the  commerce  of  the 
world,  I  listened  in  vain  for  one  word  that  showed  how  a  single,  solitary  vessel 
carrying  the  American  flag  would  go  through  the  canal.  He  told  us  how  Liver- 
pool could  use  the  canal  to  reach  the  markets  of  South  America.  He  told  us 
how  Europe  could  reach  the  Orient.  He  told  us  how  England  would  be  brought 
in  close  touch  with  her  colonies.  But  nowhere  was  a  single  flag  bearing  the 
Stars  and  Stripes  going  through  the  canal. 

As  the  canal  approaches  its  completion  the  American  people  will  look  upon  it 
as  either  a  pure  military  necessity,  the  cost  for  which  must  be  charged  off  as 
other  items  of  military  expense  are  charged  off,  or  they  will  look  upon  it  as  they 
have  been  taught  to  look  upon  it — as  a  great  agency  for  the  promotion  of  Ameri- 

95272—12090 


26 

.can  commerce.  If  the  present  bill,  unamended  and  unmodified,  becomes  a  law 
in  relation  to  the  Panama  Canal,  the  net  result  is  that  we  have  spent  $400.000,000 
for  no  purpose  on  earth  except  to  bring  a  battleship  once  in  40  years  from  the 
Pacific  Ocean  to  the  Atlantic  Ocean  in  time  of  war.  [Applause.]  Every  nation 
on  the  globe,  with  its  ships,  can  use  the  canal  to  the  same  advantage  as  ourselves, 
and,  in  addition,  we  have  even  excluded  ourselves  from  the  ordinary  advantage 
that  every  nation  claims  for  its  purely  coastwise  commerce. 

If  our  treaties  will  not  bear  the  construction  that  the  coastwise  commerce,  at 
least  of  the  United  States  is  entitled  to  preferential  rates  in  the  canal,  then  we  are 
worse  off  than  we  would  be  if  we  had  not  built  the  canal,  for  we  have  put  for- 
ever the  carrying  trade  and  monopoly  of  the  commerce  of  South  America  into 
the  hands  of  the  English  and  the  Germans. 

******* 

The  cost  of  the  canal  is  .$400,000,000.  The  interest  on  that  at  3  per  cent  is 
$12,000,000.  The  majority  report  of  the  committee  says  it  is  necessary  that 
somebody  pay  for  this  canal,  and  gives  this  as  a  reason  for  charging  tolls  to 
American  ships.  The  report  further  says  that  by  the  highest  estimate  placed  on 
the  tonnage  that  will  go  through  the  canal  by  no  possibility  can  it  pay  the 
interest  on  the  cost  of  the  investment ;  therefore  it  is  only  possible  for  us  to  get 
any  return  from  our  investment  by  encouraging  American  commerce  from  the 
east  coast  to  the  west  coast  of  America.  We  are  told  that  we  are  bound  by  the 
Hay-Pa uncefote  treaty  not  to  discriminate  in  favor  of  American  ships  as  to  the 
coastwise  trade  of  the  west  coast  of  South  and  Central  America.  We  are  told 
that  we  have  no  such  control  over  the  commerce  going  to  the  Orient  as  will 
place  us  in  any  advantageous  position  in  comparison  with  the  subsidized  ships 
of  England  or  of  Germany,  and  that  the  sole  dividend  the  American  people  can 
draw  on  that  $400,000.000  investment  is  the  possible  encouragement  of  shipping 
going  through  the  canal  between  the  east  and  west  coasts  of  America. 

If  there  be  not  that  dividend,  then  there  is  no  dividend  from  the  $400,000,000 
invested  except  the  possible  saving  of  the  expense,  once  in  40  years,  in  taking  a 
battleship  around  Cape  Horn.  We  all  hope  that  the  need  of  such  expenses  of 
taking  battleships  from  one  coast  to  the  other  will  be  on  rare  occasions  and 

very  few  and  far  between. 

******* 

Those  who  favor  charging  the  tolls  can  sit  down  and  figure  out  that  the  toll 
is  absorbed  somewhere  and  does  not  reach  the  consumer.  I  have  seen  gentle- 
men figure  that  out  in  regard  to  a  protective  tariff.  Gentlemen  have  figured 
out  that  all  kinds  of  charges  placed  on  commerce  are  absorbed  somewhere,  but 
iny  belief  is  that  ultimately  the  consumer  in  domestic  commerce  pays  the  entire 
cost  of  transportation  added  to  the  article  produced,  and  that  in  foreign  com- 
merce, where  we  come  in  competition  with  foreign  people,  the  American  pro- 
ducer pays  the  entire  cost  of  transportation,  and  that  there  is  no  absorption  of 

it  at  all. 

******* 

I  am  very  glad  that  these  gentlemen  on  the  west  coast  States  have  maintained 
this  fight  for  free  tolls,  at  least  for  American  commerce;  but  we  ought  to  go 
much  further  than  that.  We  ought  to  provide  for  preferential  duties  on  all 
goods  coming  in  American  bottoms.  We  ought  to  encourage  by  every  possible 
means  a  financial  and  mercantile  connection  with  every  Central  and  South 
American  country,  and  then  the  American  people — not  the  Pacific  coast  alone, 
but  every  American  producer  and  every  American  business  man — will  begin  to 
realize  a  dividend  upon  that  $400,000.000,  which  will  vastly  increase  the  pros- 
perity, wealth,  and  power  of  our  beloved  country.  [Applause.] 

FROM  SPEECH  OF  HON.  HENRY  CABOT  LODGE,  OF  MASSA- 
CHUSETTS, IN  THE  SENATE  OF  THE  UNITED  STATES  JULY  20, 
1912. 

Mr.  LODGE.  I  made  that  statement  because  the  question  as  to  our  right  to 
exempt  American  vessels  from  tolls  would  be  a  question  arising  under  the  inter- 
pretation of  a  treaty.  A  question  involving  the  interpretation  of  a  treaty  would 
undoubtedly  go  to  arbitration  under  our  general  arbitration  treaties  now  exist- 
ing. I  confess  at  that  moment  I  thought  only  of  that  proposition.  Since  then 
the  debate  has  developed  a  point  which  I  had  not  thought  of,  speaking  as  I  then 
did  offhand — the  question  of  the  Canal  Zone  being  domestic  territory  to  all 

95272—12090 


intents  and  purposes.  I  am  not  prepared  to  say  now,  without  further  considera- 
tion, that  we  should  be  bound  to  submit  a  purely  domestic  question  of  that  kind. 
I  have  no  question,  as  I  argued  the  other  day,  that  the  repayment  of  tolls  to 
reach  tke  same  result  of  exempting  American  vessels  would  not  be  arbitrable, 
because  that  is  purely  a  domestic  question.  Whether  our  territorial  jurisdiction 
in  the  Canal  Zone  would  not  bring  it  within  the  same  class  I  am  not  at  all  sure. 
I  am  not  prepared  to  say  that  it  would  not,  and  that  the  Senator  is  not  correct 
in  the  view  he  is  now  taking. 

******  v 

Before  I  sit  down  I  should  like,  if  I  may,  to  call  attention  to  one  thing  in  this 
connection.  We  are  now  so  familiarized  with  Panama  that  we  think  of  nothing 
else.  But  in  the  preamble  of  the  treaty  that  was  adopted,  the  actual  Hay- 
Pa  uncefote  treaty,  you  will  notice  that  it  says: 

Being  desirous  to  facilitate  the  construction  of  a  ship  canal  to  connect  'the  Atlantic 
and  Pacific  Oceans  by  whatever  route  may  be  considered  expedient,  and  to  that  end  to 
remove  any  objection  which  may  arise. 

The  route  that  was  in  everybody's  mind  at  that  time  was  the  Nicaragua  route. 
There  was  no  possible  prospect  of  our  securing  there  what  we  have  secured  in 
Panama.  All  we  could  have  hoped  to  secure  from  Nicaragua  and  Costa  Rica 
would  have  been  the  right  to  build  a  canal.  Therefore  the  situation  contem- 
plated by  that  treaty  was  one  quite  different  from  that  which  has  arisen.  That 
which  has  arisen  was  also  contemplated  as  possible. 

******* 

Mr.  CULBERSON.  Does  not  that  treaty  contemplate  and  fix  terms  in  con- 
templation of  the  United  States  themselves  "becoming  the  owner  of  the  canal? 

Mr.  LODGE.  Certainly  it  does.  As  I  said,  frankly,  I  had  not  thought  of 
that  side  of  the  question — our  taking  over  the  Canal  Zone  and  making  it  to  all 
intents  and  purposes  domestic  territory.  The  titular  sovereignty  remains  in 
Panama,  but  the  actual  sovereignty  is  in  the  United  States.  I  think  that  opens 
a  question  of  very  grave  doubt,  which  certainly  I  am  not  prepared  to  answer 
finally,  so  far  as  I  am  concerned,  at  this  moment.  I  think  it  opens  a  question 
of  very  grave  doubt  as  to  whether  that  is  not  as  much  a  matter  that  is  wholly 
within  our  own  jurisdiction  as  the  tolls  on  a  canal  built  in  our  territory,  like 
the  Sault  Ste.  Marie  or  any  of  those  canals. 

Mr.  POMERENE.  With  the  permission  of  the  Senator  from  South  Carolina, 
may  I  ask  the  Senator  from  Massachusetts  another  question? 

Mr.  LODGE.     Certainly. 

Mr.  POMERENE.  The  Senator  has  just  explained  his  reasons  for  voting 
against  the  Bard  amendment,  taking  the  position  that  without  it  we  would  have 
the  right  to  regulate  and  manage  the  canal.  The  Bard  amendment  was  a  sub- 
stitute for  article  3  of  the  pending  treaty.  The  treaty,  as  finally  ratified,  con- 
tained in  paragraph  1  of  article  3  this  language : 

The  United  States,  however,  shall  be  at  liberty  to  maintain  such  military  police  along 
the  canal  as  may  be  necessary  to  protect  it  against  lawlessness  and  disorder. 

If,  under  the  treaty,  we  had  general  authority  to  control  it  and  regulate  it, 
why  were  we  so  specific  in  stipulating  that  we  should  have  the  right  to  maintain 
the  military  police  which  might  be  necessary? 

Mr.  LODGE.  Because  at  that  time  it  was  not  known,  of  course,  on  what 
terms  we  should  have  the  zone  or  have  the  canal.  It  might  have  been  built 
through  the  territory  of  Panama  by  a  private  company  to  which  we  might  ad- 
vance our  credit.  We  could  not  tell  what  the  conditions  would  be  there.  It 
was  necessary,  therefore,  to  reserve  that  right. 

That  clause  as  it  stood  in  the  first  treaty  contained  a  prohibition  against  for- 
tification ;  and  we  put  in  the  treaty  a  Senate  amendment  giving  us  the  right  to 
defend  the  canal  in  any  way  we  pleased.  When  the  second  treaty  i^as  .made 
that  amendment  of  the  Senate  was  left  out  as  well  as  the  fortification  clause,  so 
that  no  restriction  at  all  in  regard  to  fortification  was  placed  upon  the  United 
States. 

As  the  matter  stands  now  the  military  police  provision  is  perhaps  needless. 
But  as  it  stood  then,  when  we  did  not  know  under  what  precise  terms  we  should 
build  the  canal,  it  was  necessary  to  put  it  in. 

******* 

95272 — 12090 


28 

July  17,  1912. 

Mr.  LODGE.  Mr.  President,  I  was  on  the  committee  which  had  charge  of 
the  Panama  treaty  to  which  the  Senator  refers,  and  gave  some  attention  to  it 
at  the  time.  So  I  am  not  unfamiliar  with  its  provisions.  *  *  *  If  we  are 
to  admit  that  a  foreign  Government  can  say  to  us  what  arrangements  we  shall 
make  with  our  own  shipping,  it  seems  to  me  there  is  absolutely  no  limit  to  the 
domestic  questions  which  may  be  carried  before  The  Hague  court  for  decision, 
and  no  limit  to  the  power  foreign  Governments  may  exercise  over  us. 


FROM  SPEECH  OF  HON.  J.  HARRY  COVINGTON,  OF  MARYLAND,  IN 
THE  HOUSE  OF  REPRESENTATIVES  MAY  31,    1912. 

Mr.  COVINGTON.  Mr.  Chairman,  the  amendment  now  offered  to  the  bill  to 
provide  for  free  tolls  to  American  vessels  in  the  coastwise  trade  passing  through 
the  canal  is  aptly  described  by  the  gentleman  from  Wisconsin  [Mr.  COOPER]  as 
in  no  sense  a  ship  subsidy.  The  time  has  gone  by,  as  he  states,  when  the  mere 
characterization  of  an  act  by  an  epithet  should  deter  gentlemen  on  the  floor  of 
this  House  from  meeting  squarely  any  issue. 

I  was  constrained  to  consider  for  some  time  the  argument  so  forcefully 
advanced  by  the  gentleman  from  Minnesota  [Mr.  STEVENS]  that  the  treaty 
prevented  discrimination  in  favor  of  American  vessels-  in  domestic  trade  in  the 
matter  of  canal  tolls.  It  impressed  me,  but  I  have  come  to  the  conclusion  that 
the  United  States,  when  it  negotiated  with  England  the  Hay-Pauncefote  treaty, 
never,  in  fact,  intended  to  surrender  the  absolute  right  to  control  its  domestic 
commerce,  no  matter  through  what  waterways  it  may  or  may  not  pass.  [Ap- 
plause.] We  must  recall  that  to-day  American  vessels  in  the  coastwise  trade, 
sailing  from  the  Atlantic  to  the  Pacific  coast,  that  have  passed  around  the  Horn 
or  through  the  Straits  of  Magellan  and  up  the  Pacific  coast,  are  within  the  laws 
-relating  to  coastwise  trade  already  passed  by  Congress.  These  vessels  travel 
10,000  miles,  largely  through  foreign  waterways,  and  yet  not  for  one  moment 
clo  those  vessels  cease  to  be  subject  to  all  the  regulations  of  the  coastwise  trade. 

When  we  recall  the  history  of  foundation  of  this  Government,  when  we  look 
at  the  prime  constitutional  ideas  that  established  the  American  Nation,  we  must 
understand  that  free  and  unrestricted  intercourse  between  the  States  was  very 
much  the  basis  of  creating  this  Nation  in  its  present  form  and  with  its  constitu- 
tional limitations.  There  is  no  man  in  this  Hall  who  knows  the  history  of  the 
foundation  of  the  American  Nation  who  does  not  know  that  the  Annapolis  Con- 
vention was  conceived  in  the  idea  that  the  restrictions  on  trade  placed  by  the 
various  Colonies  and  States  before  the  Revolution  and  under  the  Articles  of 
Confederation  were  sapping  the  vitality  of  the  country,  and  one  of  the  earliest 
and  strongest  purposes  of  the  founders  of  the  Constitution  was  that  there 
should  be  a  government  that  could  forever  guarantee  free  and  uninterrupted 
intercourse  between  the  States.  You  may  to-day  start  a  cargo  in  New  York 
through  the  great  canals  of  the  State  of  New  York,  iand  that  cargo  at  Buffalo, 
transship  it  by  steamers  that  are  the  equal  of  ocean  steamships,  and  land  it  at 
Duluth.  You  may  then  send  it  by  transshipment  from  Duluth  to  the  Pacific 
coast,  and  there  is  not  one  dollar  of  embargo,  not  one  tithe  of  toll,  placed  upon 
that  cargo  of  freight.  The  American  Nation  has  in  the  last  40  years  expended 
$625,000,000  in  river  and  harbor  improvements  in  this  country  for  the  benefit  of 
free  trade  between  the  States,  and  I  say  that  it  has  rightfully  made  that 
expenditure  in  order  that  this  Nation  may  be  bound  together  from  coast  to 
coast  and  from  the  Canadian  line  down  to  the  waters  of  the  Rio  Grande.  But, 
Mr.  Chairman,  there  is  no  more  right  for  us  to  say  that  those  expenditures 
should  have  been  made  in  order  that  trade  between  the  States  may  pass  freely 
than  there  is  now  to  say  that  we  shall  now  expend  money  to  construct  a  canal 
which  shall  make  possible  freer  intercourse  between  our  States  on  the  Atlantic 
and  the  Pacific  coasts.  [Applause.] 

The  argument  of  the  gentleman  from  South  Dakota  [Mr.  MARTIN],  when  he 
calls  attention  to  the  cost  of  the  Panama  Canal,  is  not  sound  or  well  stated.  It 
was  developed,  Mr.  Chairman,  in  the  hearings  before  the  Committee  on  Inter- 
state and  Foreign  Commerce,  that  the  most  tonnage  that  can  pass  through  that 
canal  annually  in  the  next  decade  will  be  1,000,000  tons  of  domestic  commerce, 
and  that,  at  a  maximum  rate  of  $1  per  ton,  will  yield  the  amount  of  $1,000,000 

95272 — 12090 


29 

annually  in  tolls.  When  we  speak  in  sums  of  money  on  the  floor  of  this  House 
in  connection  with  the  management  and  maintenance  and  protection  of  this 
canal,  $1,000,000  becomes  an  insignificant  part  of  the  total  sum.  When  we  take 
into  account  the  interest  upon  the  bonds  issued  for  construction  and  then  take 
the  cost  of  operation  and  the  cost  of  protection  of  the  canal,  the  question  of  the 
levy  of  $1  a  ton  upon  only  1,000,000  tons  of  traffic  in  the  coastwise  trade  using 
that  waterway  becomes  so  relatively  small  that  it  ought  not  seriously  to  weigh 
with  gentlemen  in  this  House  when  they  are  determining  whether  or  not  they 
want  to  provide  for  our  domestic  commerce  through  that  canal  in  strict  accord- 
ance with  the  great  American  principle  of  free  intercourse  between  the  States; 
and  I  want  to  assert  in  conclusion  that,  believing  it  is  Democratic  doctrine  to 
guarantee  at  all  times  the  free  intercourse  between  our  States,  and  that  it  is 
sound  policy  that  this  Nation  should  not  fetter  but  encourage  the  commerce 
between  any  sections  of  it,  I  support  the  amendment.  [Applause.] 


FROM   SPEECH  OF   HON.   CHARLES  E.   TOWNSEND,   OF   MICHIGAN, 
IN  THE  SENATE  OF  THE  UNITED  STATES  JULY   18,   1912. 

Mr.  TOWN  SEND.  Mr.  President,  the  canal  has  been  dug  through  American 
territory  acquired  from  a  foreign  country  for  the  very  purposes  to  which  it  has 
been  applied.  Due  to  treaty  relations  with  Great  Britain,  it  was  necessary  for 
the  United  States  to  do  more  than  acquire  the  right  of  way  from  the  Republic 
of  Panama.  Said  treaty  relations  were  entered  into  in  1850.  They  dealt  with 
the  possibility  of  canal  construction  across  the  Isthmus  by  private  enterprise 
and  provided  for  united  protection  of  any  canal  which  might  be  built.  The 
treaty  prohibited  fortification  by  either  signatory  power  and  denied  to  each 
country  the  right  to  secure  any  special  benefits  not  enjoyed  by  the  other.  All 
attempts  at  canal  construction  having  failed,  it  was  proposed  in  1900  that  the 
United  States  should  undertake  the  enterprise.  It  was  to  do  the  work,  pay  all 
the  expense,  both  of  construction  and  of  operation  and  maintenance.  It  is 
possible  that  the  United  States  could  have  dug  and  operated  the  canal  under 
the  Claytou-Bulwer  treaty  if  it  had  been  willing  unselfishly  to  have  assumed 
all  responsibility,  to  pay  all  bills,  and  then  give  Great  Britain  and  all  other 
countries  demanding  the  same  privileges  the  right  to  use  the  waterway  on  the 
same  terms  as  the  United  States  used  it;  but  under  that  treaty  the  United 
States  could  not  fortify  property  which  would  cost  it  $400,(K)0,000 ;  it  could  not 
grant  any  special  privileges  to  its  own  people.  The  provisions  of  the  treaty 
of  1850  rendered  canal  construction  by  the  United  States  unwise  and  imprac- 
ticable; hence  the  necessity  for  abrogating  that  treaty  and  the  making  of  a 
new  one. 

******* 

This  Government  had  two  objects  in  view  when  it  undertook  to  construct  the 
Panama  Canal.  One  was  to  benefit  commerce,  the  other  was  to  provide  for  the 
national  defense,  and  no  rational  man  supposes  that  it  did  not  have  in  contem- 
plation an  especial  benefit  to  American  commerce,  an  especial  aid  to  American 
defense.  Certain  it  is  that  Great  Britain  will  never  claim  that  we  entered 
upon  the  construction  of  this  great  work  on  American  territory  uninspired  by 
a  purpose  to  improve  our  purse  and  strengthen  our  arm.  We  build  the  canal, 
we  pay  the  cost,  we  protect  it  against  injury,  we  preserve  its  neutrality,  we 
secure  its  sanitation,  and  we  have  promised  to  treat  all  nations  equally,  fairly, 
and  equitably.  It  is  evident  to  me  that  the  nation  which  undertakes  to  do 
these  things  is  exempted  from  the  term  "  all  nations,"  and  we  are  clearly 
entitled  to  charge  such  tolls  upon  the  foreign  tonnage  using  the  canal  as  we 
may  determine,  subject  only  to  the  proviso  that  they  are  just  and  equitable 
and  that  no  discriminations  are  permitted. 

It  is  insisted  by  some  distinguished  lawyers  that  the  Hay-Pauncefote  treaty 
forbids  us  to  impose  tolls  upon  foreign  canal  shipping  if  we  permit  our  coast- 
wise boats  to  pass  through  the  canal  free,  but  it  seems  to  me  there  can  be  no 
good  reason,  and  I  say  this  respectfully,  for  at  least  none  has  been  shown  to 
me,  for  such  belief.  Certain  it  is  that  no  foreign  boat  can  now  engage  in  our 
coastwise  trade — in  our  interstate  commerce — nor  cou.kl  they  do  so  when  this 
treaty  was  made,  and  if  we  now  permit  our  American  boats  engaged  in  our 
coastwise  trade  and  with  which  no  foreign  boat  ie  allowed  under  existing  law 
95272—12090 


30 

to  compete  to  pass  without  charge  through  the  canal  are  we  discriminating 
against  English  or  German  or  other  foreign  tonnage  when  we  impose  tolls  upon 
it?  How  is  the  foreigner  affected  by  this  alleged  discrimination?  Certain  it 
is  we  are  not  changing  his  relations  to  the  American,  for  we  are  in  this  partic- 
ular case  dealing  with  commerce  with  which  the  former  has  not  now  uor  will 
he  have  after  the  completion  of  the  canal  anything  to  do.  This  is  a  purely 
local  matter  and  unaffected,  so  far  as  the  foreigner  is  concerned,  by  the  canal. 
If  all  of  our  transcontinental  commerce  now  carried  by  the  railroads  was  trans- 
ferred to  water  carriers  through  the  canal  without  tolls,  would  any  foreign  boat 
be  denied  any  advantage  which  it  now  enjoys  or  which  it  could  enjoy  through 
the  canal  under  the  existing  law  as  to  coastwise  traffic,  which  law  it  is  not 
proposed  to  change? 

*  *  *  *  »•'.'*  * 

It  is  needless  to  discuss  in  detail  the  circumstances  which  in  1850  revived 
the  old  desire  for  a  canal.  It  is  sufficient  that  such  a  desire  was  strongly 
revived  at  that  time.  The  year  before  the  United  States  had  made  a  contract 
with  Nicaragua  whereby  the  latter  granted  to  an  American  company  the  right 
to  construct  a  canal  via  the  San  Juan  River  and  Lake  Nicaragua  between  the 
two  oceans.  It  should  be  borne  in  mind  that  Great  Britain  was  not  favorable 
to  this  contract.  She  claimed  an  interest  in  and  protectorate  over  the  Mosquito 
Coast,  and  insisted  that  she  had  rights  in  Costa  Rica  and  Nicaragua.  The 
United  States  did  not  admit  these  British  claims,  but  nevertheless  she  had  to 
consider  them,  and  they  were  influential  in  causing  the  Clayton-Bulwer  treaty 
of  1850.  The  possibility  of  a  canal  built  by  private  capital  through  alleged 
British  territory  was  being  considered.  Another  company  was  contemplating 
a  waterway  via  Panama.  Under  these  conditions  it  was  finally  agreed  that 
neither  Great  Britain  nor  the  United  States  should  take  or  hold  or  enjoy  any 
benefits  in  any  canal  built  by  private  enterprise  which  the  other  did  not  have. 
Understand  that,  the  then  pending  proposition  of  a  Nicaragua  canal  was  not 
for  one  to  be  built  by  Great  Britain  or  by  the  United  States,  and  all  the  pro- 
visions contained  in  the  Clayton-Bulwer  treaty  prohibiting  the  fortification,  not 
of  a  canal  which  either  country  owned  but  fortifications  in  the  vicinity  of  the 
canal,  must  be  taken  into  consideration  in  order  to  determine  exactly  what  the 
relations  were  between  the  United  States  and  England  at  the  time  of  the 
making  of  the  treaty  of  1850. 

******* 

Some  Senators,  who  readily  admit  that  we  have  the  right  under  the  treaty  of 
1901  to  remit  tolls  on  our  coastwise  shipping  passing  through  the  canal,  do  not 
believe  that  we  have  the  right  to  pass  free  of  tolls  boats  of  American  registry 
engaged  in  trade  between  the  United  States  and  a  foreign  country,  and  I  can 
see  better  grounds  for  this  belief  than  in  the  case  of  our  domestic  shipping. 
But  if  my  heretofore  expressed  opinion  that  "  all  nations,"  as  used  in  article  3 
of  the  treaty,  excludes  the  United  States,  which  is  the  owning,  constructing, 
operating  Nation — the  Nation  which  provides  the  rules,  and  hence  is  responsible 
for  the  canal  and  its  operation — then  certainly  we  have  the  right  to  retain  a 
benefit  which  common  sense  and  common  justice  would  warrant. 

But  the  same  gentlemen  who  would  deny  us  the  right  to  pass  our  merchant- 
men through  the  canal  free  of  tolls  insist  that  we  can  pass  our  warships  through 
without  charge.  They  contend  that  to  admit  the  former  under  the  treaty  we 
would  have  to  interpolate  words  and  meaning  which  the  letter  of  the  treaty 
does  not  contain,  but  the  same  is  equally  true  as  to  vessels  of  war.  Gentlemen 
will  use  reason  in  interpreting  the  provision  as  to  war  vessels,  but  refuse  to 
apply  it  in  the  case  of  vessels  of  commerce,  although  these  two  classes  of  ships 
are  found  in  the  same  paragraph  of  the  treaty,  joined  by  the  conjunction  "  and." 

It  is  generally  admitted  that  nearly  every  foreign  nation  grants  a  subsidy  to 
its  boat  lines  engaged  in  foreign  commerce,  and  it  has  been  reported  that  some 
of  the  foreign  countries  are  already  making  legal  provision  for  paying  to  ships 
passing  through  the  canal  whatever  tolls  may  have  been  paid  to  the  United  j 
States.  Will  anyone  contend  that  our  Government  could  not  do  the  same  things 
to  American  boats?  If  this  could  be  done  indirectly  by  repayment,  will  it  be 
contended  that  it  can  not  be  done  directly? 

But  a  majority  of  the  committee,  having  in  mind  the  desirability  of  building 
up  our  merchant  marine,  and  wishing  to  satisfy,  as  far  as  possible,  the  objec-  ! 
tions  of  Senators  who  do  not  read  the  treaty  as  some  of  us  do,  has  inserted  in 
the  bill  a  provision  that  the  American  boat  engaged  in  the  foreign  trade  in  order 
95272—12090 


31 

to  receive  free  passage  through  the  canal  must  enter  into  a  contract  to  the 
effect  that  in  case  of  war  or  other  emergency  such  vessel  may  be  appropriated 
and  used  by  the  United  States.  Under  the  clear  and  undisputed  terms  of  the 
treaty  this  proposed  condition  would  constitute  a  class  of  boats  which  could  be 
passed  without  tolls,  and  no  discrimination  would  be  practiced. 

******* 

What  I  said  at  the  beginning  in  reference  to  tolls  was  general  and  applied 
to  all  nations,  but  permit  me  to  advert  briefly  to  the  special  case  of  Canada. 
It  is  urged  that  if  the  tollgates  swing  free  to  United  States  boats,  but  will 
open  to  Canadian  boats  only  upon  the  payment  of  tolls,  that  the  Dominion  will 
retaliate  at  the  Canadian  Soo,  the  Welland  and  St.  Lawrence  Canals.  I  can 
not  so  believe,  and  I  would  not  violate  either  the  letter  or  the  spirit  of  our 
treaty  relations  with  our  neighbor  on  the  north,  although  her  present  adminis- 
tration seems  actuated  by  something  less  than  the  truest  feelings  of  amity 
and  good  will  toward  us.  Our  existing  treaty  with  Canada  gives  that  country 
no  right  to  participate  in  our  coastwise  traffic.  It  does  provide,  however,  that 
both  nations  can  on  equal  terms  use  the  Canadian  and  American  Soo  locks 
and  canals,  the  American  St.  Glair  Canal,  the  Detroit  River  artificial  channel, 
the  Welland  and  the  St.  Lawrence  Canals.  The  benefits  to  the  two  countries 
are  mutual.  There  is  actual  and  real  reciprocity  in  this  treaty,  and  no  bene- 
fits from  any  other  sources  than  those  inhering  in  the  mutual  use  of  the  Great 
Lakes,  the  Welland  Canal,  and  the  St.  Lawrence  River  were  contemplated. 

It  is  true  that  until  our  new  Soo  lock,  which  is  in  process  of  construction,  is 
completed,  lake  traffic  would  be  retarded  if  we  were  denied  the  use  of  the 
Canadian  Soo  locks  for  some  of  our  large  boats,  but  our  treaty  with  the 
Dominion  will  not  have  terminated  before  our  new  lock  will  be  done  and 
Canada  will  have  no  just  cause  to  abrogate  the  treaty  if  we  live  up  to  our 
part  of  the  contract,  and  we  will.  We  will  be  just  to  all  nations,  and  in  this 
instance  "  all "  will  include  our  own. 

*          •        *     .  *  *  *  #  * 

Free  ships  will  have  a  tendency  to  encourage  the  building  and  operating  of 
more  ships,  and  this  result  will,  through  competition,  have  a  tendency  to 
materially  reduce  rates  to  such  an  extent  that  the  consignee — the  consumer — 
will  get  the  benefit.  But  the  boat  rates  must  be  met  by  the  rail  rates.  This  fact 
has  been  made  eloquent  by  every  act  of  the  railroad  companies  since  the  canal 
project  was  started.  It  is  because  of  this  fact  that  railroad  managers  want 
a  controlling  hand  in  canal  affairs.  They  know  that  this  completed  enterprise 
\vil!  be  more  potent  in  reducing  rates  and  in  furnishing  adequate  facilities  than 
all  the  orders  of  the  Interstate  Commerce  Commission  and  all  the  decrees  of 
the  courts.  We  may  not  be  able  to  balance  all  influences  and  segregate  those 
which  are  properly  due  to  canal  influence,  but  we  may  be  sure  that  the  lower 
rail  rates  will  inure  to  the  benefit  of  the  people,  as  they  should,  because  it 
was  their  genius  which  conceived  this  enterprise,  it  was  their  money  and 
energy  which  constructed  it,  and  it  will  be  their  patriotism  which  will  main- 
tain and  operate  it. 

FROM  SPEECH  OF   HON.   JULIUS  KAHN,   OF   CALIFORNIA,   IN   THE 
HOUSE  OF  REPRESENTATIVES   MAY  21,    1912. 

Mr.  KAHN.  Mr.  Chairman,  I  have  listened  attentively  to  the  debate,  and  I 
have  heard  a  great  deal  said  about  the  provisions  of  the  Hay-Pauncefote  treaty 
and  their  effect  upon  this  legislation.  I  believe  our  country  has  been  looked 
upon  by  the  rest  of  the  world  as  a  Nation  of  altruists.  Since  our  entrance  into 
the  family  of  nations  we  have  been  doing  things  unselfishly  for  the  benefit  of 
mankind.  As  early  as-  1815  Commodore  Stephen  Decatur  destroyed  the  power 
of  the  Barbary  pirates,  in  Algeria,  Tunis,  and  Tripoli,  and  the  countries  of 
Europe  thanked  us  for  the  good  work.  Later  on,  on  December  2,  18.23,  Presi- 
dent Monroe  announced  his  famous  doctrine  that  we  would  look  upon  the  ag- 
gression of  any  European  power  on  American  territory  as  an  unfriendly  act. 
The  world  has  tacitly  accepted  that  doctrine.  In  1898  we  went  into  Cuba  in 
the  great  cause  of  humanity,  and  gave  liberty  to  the  oppressed  people  of  that 
•island.  A  year  or  two  ago,  in  the  cause  "of  human  justice,  we  returned  our 
indemnity  to  China.  To-day  we  are  helping  the  Republic  of  Santo  Domingo  in 
solving  its  financial  difficulties.  But  despite  these  evidences  of  altruism,  there 

95272 — 12090 


32 

is  not  a  single  nation  in  the  world  that  believes  we  are  crazy  enough  to  spend 
$400,000,000  in  constructing  this  canal  without  giving  an  advantage  in  the 
matter  of  coastwise  shipping  to  our  own  citizens.  [Applause.]  And  the  time 
to  settle  the  question  as  to  our  rights  in  the  premises  is  now,  on  this  bill,  the 
first  bill  that  attempts  to  regulate  the  commerce  of  that  canal.  If  there  be  any 
question  about  our  rights  under  the  treaty,  let  us  settle  it  now.  It  will  un- 
doubtedly be  determined  in  our  favor. 

******* 
Mr.  Chairman,  this  proposition  of  free  tolls  to  American  ships  in  the  coastwise 
trade  means  much  to  the  American  merchant  marine.  I  believe  that  free  tolls 
will  encourage  the  building  of  American  ships  for  this  trade.  The  building  of 
American  ships  means  auxiliary  cruisers  and  colliers  for  our  Navy  in  time  of 
war.  It  was  the  historic  cruise  of  the  battleship  Oreffon  all  the  way  around 
South  America  to  Santiago  de  Cuba,  during  the  Spanish-American  War,  that 
helped  materially  to  bring  about  the  legislation  for  the  construction  of  the 
Panama  Canal.  It  is  only  a  few  years  since  our  battleship  fleet,  in  its  cruise 
around  the  world,  gave  a  practical  demonstration  of  the  weakness  of  our  mer- 
chant marine  to  all  the  nations  of  the  earth.  For  it  was  a  fleet  of  foreign  mer- 
chant vessels,  carrying  foreign  flags,  that  acted  as  colliers  for  our  battleship 
fleet.  In  case  of  war  we  could  not  procure  the  services  of  similar  colliers.  We 
clearly  need  American  ships.  Let  us  by  our  votes  to-day  do  something  for  the 
upbuilding  of  an  American  merchant  marine.  Let  us  not  neglect  this  oppor- 
tunity. And  I  feel  confident  the  great  majority  of  our  countrymen  will  approve 
and  applaud  our  course. 

FROM  SPEECH  OF  HON.  WILLIAM  M.  CALDER,  OF  NEW  YORK,  IN 
THE  HOUSE  OF  REPRESENTATIVES  MAY  17,  1912. 

Mr.  CALDER.  Mr.  Chairman,  the  great  problem  that  is  occupying  the  atten- 
tion of  the  business  world  is  the  question  of  transportation.  This  Government 
in  the  creation  of  the  Interstate  Commerce  Commission  sought  to  regulate  trans- 
portation over  railroads,  and  in  subsequent  legislation  amendatory  of  the  inter- 
state-commerce act  has  increased  the  powers  of  the  Interstate  Commerce  Com- 
mission to  an  extent  not  dreamed  of  by  the  authors  of  the  original  act,  so  that 
to-day  the  commission  has  power  not  only  to  pa^s  upon  the  question  of  rebates, 
practices,  and  regulations  of  all  description,  but  also  passes  upon  the  sufficiency 
of  rates,  and  has  the  right  under  the  law  to  fix  same.  As  a  result  of  this 
legislation  we  have  done  away  with  unfair  methods  and  have  prohibited  a  con- 
dition of  affairs  \vhereby  one  shipper  could  be  favored  over  another,  thus  plac- 
ing every  shipping  concern  and  every  railroad  in  the  United  States  on  an  equal 
footing  with  the  other.  All  of  this  has  been  of  the  greatest  benefit  to  the  rail- 
roads. It  has  stopped  the  giving  of  free  transportation ;  it  has  stopped  ruinous 
competition,  and  to-day  no  honestly  conducted  railroad  would  agree  for  a 
moment  that  they  would  favor  its  repeal. 

In  the  consideration  of  section  5  of  the  Panama  bill  we  are  dealing  with  a 
subject  of  as  great  importance  to  the  shipping  interests  of  the  country  as  Con- 
gress did  in  the  consideration  of  the  interstate-commerce  law  and  in  the  amend- 
ments thereto.  In  the  effort  to  encourage  traffic  through  the  canal  we  are 
establishing  a  competitor  with  the  railroads  in  which  every  part  of  the  United 
States  is  vitally  interested.  I  represent  on  this  floor  a  district  in  the  city  of 
New  York.  As  a  result  of  the  opening  of  the  Panama  Canal  that  city  will  be- 
come within  a  short  period  easily  the  greatest  commercial  center  in  the  world. 
The  granting  of  free  tolls  to  the  ships  in  the  coastwise  trade  will  unquestionably 
add  some  to  the  commercial  importance  of  that  city,  but  it  is  of  small  moment 
compared  to  its  effect  upon  the  agricultural  and  manufacturing  business  of  the 
entire  country.  It  has  been  well  said  in  the  minority  report : 

The  tolls  imposed  at  the  canal  will  be  added  to  the  freight  paid  by  the  American  people 
who  consume  the  commodities.  We  hold  this  proposition  to  be  fundamental  :  and  viewed 
in  this  light,  free  tolls  to  our  coastwise  trade  would  not  be  a  subsidy  to  shipowners,  but 
a  concession  to  the  American  people. 

Every  ton  of  merchandise  carried  through  the  canal  is  that  much  merchan- 
dise taken  from  the  transcontinental  railroads,  thereby  compelling  the  trans- 
continental roads  to  compete  with  the  canal.  The  effect  of  this,  it  seems  plain 
to  me,  would  be  to  compel  the  transcontinental  roads  to  meet  the  competition 

95272—12090 


33 

of  the  canal,  thereby  lessening  freight  rates  between  points  within  the  country. 
The  impression  seems  to  prevail  that  the  only  people  to  be  benefited  by  the  free 
tolls  in  the  coastwise  trade  are  at  points  on  the  Atlantic  and  Pacific  coasts. 
Careful  consideration  of  the  proposition  will  convince  everybody,  I  am  sure, 
that  any  reduction  in  freight  rates  forced  by  sea  competition  between  New  York 
and  San  Francisco  is  contemporaneously  applied  between  Chicago  and  St.  Paul, 
Kansas  City  and  St.  Louis,  and,  in  fact,  every  city  of  the  Middle  West  on  the 
one  hand  and  the  Pacific  coast  cities  and  towns  on  the  other.  The.  selfish  inter- 
ests of  the  railroads  serving  the  Middle  West  is  the  strongest  possible  guaranty 
of  the  perpetuity  of  this  already  established  rate-making  system.  If,  by  reason 
of  free  tolls  to  vessels  in  the  coastwise  trade,  freight  rates  between  New  York 
and  Seattle  would  be  less  than  if  tolls  were  charged,  they  will  by  the  same 
measure  be  less  between  St.  Paul  and  Chicago,  Omaha  and  St.  Louis,  and 
Kansas  City  on  the  one  hand  and  Seattle  and  Portland,  San  Francisco  and  Los 
Angeles  on  the  other.  In  all  of  the  hearings  before  the  Committee  on  Inter- 
state and  Foreign  Commerce  on  the  subject  of  free  tolls  no  one  appeared  in  ad- 
vocacy of  American  ships  engaged  in  the  coastwise  trade  paying  tolls. 


FROM  SPEECH  OF  HON.   ALBERT  B.   CUMMINS,   OF  IOWA,   IN  THE 
SENATE  OF  THE  UNITED  STATES  AUGUST   7,    1912. 

Mr.  CUMMINS.  Mr.  President,  it  is  very  unfortunate  that  there  are  such 
differences  of  opinion  upon  the  question  of  our  right  to  care  for  our  own  people 
under  this  treaty  to  a  greater  extent  than  we  are  called  upon  to  care  for  the 
other  peoples  of  the  world.  I  have  not  known  any  disagreement  here  in  my 
short  experience  so  fraught  with  injurious  consequences  as  the  disagreement- 
respecting  the  interpretation  of  this  contract  between  the  United  States  and 
Great  Britain.  It  is  of  vast  import.  We  must  decide  it,  and  we  must  decide  it 
now.  There  is  no  possibility  under  the  circumstances  which  surround  us  of 
evading  the  duty  and  the  responsibility  which  have  come  to  us,  not  by  our  own 
act,  but  through  the  act  of  Great  Britain. 

I  do  not  know  just  what  I  can  say  with  propriety  in  debating  a  question  of 
this  character  in  open  session,  and  I  want  to  debate  it  in  open  session.  I 
premise  all  that  I  have  to  say  by  the  assertion  that  I  want  to  stay  within  the 
boundaries  of  propriety;  I  want  to  say  nothing  that  will  disturb  the  peace  we 
have  so  long  enjoyed,  but  Great  Britain  has  put  the  Congress  of  the  United 
States  in  a  position  that  makes  it  absolutely  necessary  that  we  shall  now  con- 
strue this  treaty;  that  we  shall  put  whatever  interpretation  is  to  be  put  upon 
it  by  the  United  States.  We  may  defer  the  exercise  of  the  right,  if  we  like, 
by  attaching  the  same  charges  to  all  ships  that  pass  through  the  canal,  but  we 
can  not  defer  the  assertion  of  the  right  if  we  ever  intend  to  exercise  it. 

Let  us  see.  The  House  of  Representatives  passed  a  bill  which  in  its  terms 
proposed  to  give  to  the  shipping  of  the  United  States  a  lower  toll,  or  some 
greater  advantage,  than  it  proposed  to  give  to  the  shipping  of  the  world. 
Thereupon,  Great  Britain  formally  presented  a  protest  to  the  United  States, 
through  the  Secretary  of  State,  who  esteems  it  to  be  his  duty — as  I  have  no 
doubt  it  was — to  lay  the  protest  before  the  Congress  of  the  country.  *  *  * 
Her  protest  here  stands  as  a  notice  to  the  Congress  of  the  United  States  that, 
if  we  pass  the  law  which  attempts  to  discriminate  between  our  shipping  and 
the  shipping  of  the  rest  of  the  world,  she  would*  regard  it  as  a  violation  of  the 
treaty  of  1901. 

Tell  me,  if  you  can,  how  we  are  to  escape,  if  we  wanted  to  escape,  the  duty 
of  answering  that  protest.  If  we  do  not  now  assert  whatever  right  we  have 
under  this  treaty,  we  will  surrender  it  forever,  and  in  my  opinion  the  Congress 
that  does  surrender  it  will  be  universally  condemned,  and  the  administration 
that  participates  in  the  surrender  will  be  remembered  only  to  be  condemned 
so  long  as  free  institutions  exist  in  the  United  States  and  so  long  as  the  spirit 
of  independence  prevails  in  the  hearts  of  Americans.  All  that,  however,  is 
upon  the  assumption  that  the  interpretation  which  I  believe  this  treaty  bears 
and  which  has  been  asserted  by  the  House  of  Representatives  is  true  and  just, 
and  it  is  to  that  question  I  intend  to  devote  my  time. 

******* 

*  *  *  I  believe,  and  it  can  be  conclusively  shown,  that  the  treaty  contains 
no  promise  on  the  part  of  the  United  States  that  it  will  extend  to  the  other 
nations  of  the  world  the  same  tolls  and  the  same  conditions  that  we  give  to 

95272 — 12090 3 


34 

our  own  shipping.     There  is  no  such  promise  in  the  treaty.    It  was  never 
intended  that  there  should  be  any  such  promise  in  the  treaty. 

I  do  not  claim  that  it  is  expressed  as  happily  and  fortunately  as  it  could 
have  been  expressed,  but  I  am  here  to  rescue  our  diplomatists  from  some  of  the 
criticism,  some  of  the  censure  that  have  fallen  upon  them  in  this  debate.  I 
clo  not  believe  that  John  Hay  has  justly  incurred  the  censure  which  impliedly 
has  grown  out  of  this  discussion.  I  think  that  with  reasonable  plainness  he 
lias  set  down  the  obligation  of  the  United  States,  and  if  we  are  not  searching 
for  an  opportunity  to  favor  other  nations  at  our  own  expense,  we  will  have 
no  difficulty  in  arriving  at  the  conclusion  which  I  believe  he  intended  to  express. 

I  take  the  treaty  just  as  it  is.  I  eliminate  no  word  from  it.  I  incorporate 
no  word  into  it.  I  take  it  with  all  its  history,  with  all  the  circumstances  which 
surrounded  it  when  made,  and  I  believe  that  I  can  prove  to  any  impartial 
mind  that  there  is  here  no  promise  whatsoever  that  the  ships  of  Great  Britain 
shall  pass  through  this  canal  upon  the  same  terms  as  to  charges  and  the  same 
conditions  as  to  passage  which  our  own  ships  may  enjoy. 

******* 

In  1850  and  before,  everybody  knows  there  was  an  enterprise  on  foot — one 
organized  by  private  persons,  and  it  was  to  be  carried  on  by  private  capital — 
to  build  a  canal  across  Nicaragua.  You  will  all  remember  that  not  very  long 
before  that  we  had  acquired  California,  and  that  just  a  year  or  two  before  gold 
had  been  discovered  in  California,  and  in  1849  and  1850  there  were  thousands 
of  Americans  struggling  across  the  Isthmus  of  Panama,  dying  every  mile  of 
the  way.  There  is  no  route  known  to  civilized  man  which  has  witnessed  more 
hardship  and  struggle  than  the  route  between  the  Atlantic  and  the  Pacific  at 
Panama. 

There  was  a  great  desire  for  some  better  means  of  communication,  and  a 
company  of  Americans  had  proposed  to  build  a  railway  across  the  Isthmus  of 
Panama.  It  was  already  fairly  well  organized,  but  then,  as  now,  conditions 
in  the  Central  American  States  were  not  favorable.  Revolutions  were  common ; 
governments  were  not  strong;  and  the  men  who  it  was  thought  might  invest 
their  money  in  the  proposed  canal  at  Nicaragua  and  the  men  who  had  proposed 
to  invest  their  money  in  the  railway  at  Panama  were  not  willing  to  do  it  unless 
the  safety  of  the  physical  property  which  they  created  could  be  assured  and 
unless  responsible  nations  guaranteed  that  justice  would  be  done  to  them. 

It  was  to  give  that  assurance  and  secure  that  construction  that  the  treaty  of 
1850  was  made,  and  while,  as  I  said  a  moment  ago,  there  are  some  things  in  it 
which  in  the  light  of  this  day  we  would  not  have  inserted,  upon  the  whole  it  is 
not  to  be  criticized.  On  the  other  hand,  I  think  it  is  to  be  praised  as  an 
evidence  of  the  forward  spirit  of  a  Republic  then  weaker  and  less  able  to 
accomplish  things  than  now.  The  treaty  was  made,  the  railway  at  Panama 
was  immediately  built,  and  ever  since  that  time,  or  at  least  until  the  railway 
at  Tehuantepec  was  constructed,  it  afforded  the  readiest  means  of  passage  from 
one  coast  of  this  country  to  the  other,  as  well  as  the  readiest  means  of  passage 
from  the  west  coast  of  South  America  to  Europe.  That  was  the  real  reason 
for  the  treaty  of  1850,  and  it  accompli  seel  its  purpose.  I  pass  along. 

I  have  110  doubt  that  both  nations  practically  regarded  the  treaty  as  functus 
officio.  I  have  no  doubt  that  both  of  them  for  years  and  years  did  not  look  upon 
it  as  containing  any  obligation  that  was  material  to  the  present  time.  However 
that  may  be,  when  we  came,  in  1901,  to  make  this  treaty  there  it  was.  It  had 
never  been  abrogated,  although  ft  may  have  been  violated  by  both  parties.  But 
I  do  not  know  as  to  that.  It  is  asserted  that  it  was  often  violated  by  Great 
Britain,  but  I  have  not  thought  it  material  to  inquire  as  to  that  charge.  But, 
at  any  rate,  when  we  came  to  1901  there  were  obligations  in  the  Clayton-Bulwer 
treaty  that  it  was  necessary  to  abrogate  in  order  to  maintain  friendly  and 
peaceful  relations  with  Great  Britain  if  we  intended  to  go  forward  with  the 
project. 

And  here  I  disagree  with  the  Senator  from  North  Dakota  [Mr.  MCCUMBER] 
wholly,  and  I  put  it  squarely  now.  I  am  sorry  he  is  not  here.  I  am  sorry  he  is 
not  here  because  if  I  misrepresent  him  he  is  the  best  person  in  the  world  to  put 
me  right.  He  says,  or  it  is  his  view,  that  a  part  of  the  treaty  of  1850  remains  in 
force  without  having  been  incorporated  into  the  treaty  of  1901.  He  finds  in  the 
treaty  of  1850  an  agreement  on  the  ^art  of  the  United  States  that  this  canal 
shall  be  used  by  all  the  nations  of  the  world,  including  the  United  States,  upon 
equal  terms. 

95272—12090 


35 


I  do  not  dispute  that  construction  of  the  treaty  of  1850;  and  if  that  part  of 
the  treaty  of  1S50  is  still  in  force,  or  if  any  part  of  it  is  in  force  upon  that 
subject,  then  there  is  much  reason  for  accepting  the  conclusion  of  the  Sena  tor 
from  North  Dakota.  But  I  maintain  that  there  is  no  part  of  the  treaty  of  1850 
in  force,  that  it  has  been  superseded  and  abrogated  by  the  treaty  of  1901,  and 
that  neither  Great  Britain  is  responsible  to  us  for  anything  contained  in  the 
treaty  of  1850  nor  are  we  responsible  to  Great  Britain  for  anything  found  there 
unless  the  obligation  has  been  reproduced  and  reenacted  in  the  treaty  of  1901. 

I  look  only  to  the  treaty  of  1901.  I  am  quite  willing  to  examine  into  the 
history  of  the  Clayton-Bulwer  treaty  for  the  purpose  of  understanding  the  exact 
situation  of  our  State  Department  and  of  Great  Britain  a-t  that  time.  I  am  quite 
willing  to  look  into  the  history  of  our  country  for  the  purpose  of  trying  to 
understand  better  the  spirit  that  then  prevailed  and  what  the  two  nations 
really  desired  to  accomplish ;  but,  after  all,  when  we  have  examined  the  history, 
when  we  have  become  thoroughly  familiar  with  the  spirit  of  1850,  it  is  yet  true 
that  unless  we  can  find  in  the  treaty  of  1901  some  promise  that  we  will  treat  all 
the  ships  of  the  world,  including  our  own,  upon  terms  of  equality,  then  the 
argument  falls  to  the  ground. 

I  ask  the  attention  of  the  Senate  for  an  examination  of  this  treaty  and  to  my 
reasons  for  believing  that  it  does  not  embrace  any  such  promise. 

My  proposition  is  that  the  Government  of  the  United  States  undertook  the 
enterprise,  and  the  rules  that  would  have  been  applicable  to  it  if  it  had  been 
carried  forward  by  private  enterprise  are  not  applicable  or  appropriate  now, 
because  there  are  certain  qualities  in  sovereignty  that  ought  not  to  be  surren- 
dered, and  only  the  clearest  terms  will  warrant  the  construction  that  surrenders 
them. 

AFTER   RECESS. 

Mr.  President,  before  the  recess  I  had  called  attention  to  the  chief  purpose  of 
the  treaty  of  1850.  Around  that  purpose  all  the  obligations  of  that  agreement 
are  found.  I  do  not  want  to  be  understood  as  saying — although  it  may  be  that 
in  the  effort  to  be  brief  I  did  say — that  the  protection  to  the  enterprises  about 
to  be  carried  forward  or  that  were  believed  to  be  imminent  was  the  sole  pur- 
pose of  the  Clayton-Bulwer  treaty.  The  protection  that  was  given  by  the  two 
Governments  was  accompanied,  of  course,  with  agreements  respecting  the  use 
of  the  proposed  canal  and  the  use  of  the  proposed  railway. 

When  we  came,  in  1901,  to  consider  the  subject  again  the  whole  situation  had 
changed.  The  enterprise  that  was  in  view  in  1850  had  never  been  carried  for- 
ward so  far  as  the  canal  was  concerned.  It  was  discovered  that  in  all  proba- 
bility there  never  would  be  a  canal  unless  undertaken  by  some  governmental 
power.  The  French  company  had  intervened  at  Panama  and  had  gone  into 
miserable  failure  and  bankruptcy.  When,  therefore,  the  respective  departments 
of  the  two  Governments  took  up  the  subject  again  it  was  known  that  unless  the 
Government  of  the  United  States  undertook  to  build  a  canal  across  the  Isthmus 
it  would  in  all  probability  never  be  built,  and  the  whole  negotiation  had  that 
in  view. 

I  agree  that  it  was  supposed  that  the  canal  would  be  built  upon  the  Nicaragua 
route,  but  I  deny  that  the  possibility  of  building  the  canal  upon  the  Panama 
route  was  not  present  in  the  minds  of  a  great  many  people,  and  it  is  perfectly 
manifest  from  the  treaty  itself  that  it  was  not  absent  from  the  minds  of  the 
men  who  composed  the  agreement  now  under  consideration.  The  possibility  that 
the  United  States  might  acquire  the  French  company  and  become  the  possessor 
of  all  the  work  that  it  had  done,  all  the  machinery  that  it  had  accumulated,  and 
all  the  concessions  that  had  been  granted  to  it  was  perfectly  well  understood  by 
those  who  at  that  time  were  interested  in  the  project. 

But  the  chief  thing  that  I  want  the  Senate  to  bear  in  mind  is  that  it  was 
then  known  that  whether  the  canal  was  built  over  the  Nicaragua  route  or  over 
the  Panama  route  it  was  the  Government  of  the  United  States  that  would  build 
it,  either  directly  or  indirectly.  It  was,  I  think,  the  uppermost  thought  in  the 
minds  of  the  men  who  represented  the  United  States  that  the  Government 
would  build  this  canal  as  a  sovereign,  and  not  merely  furnish  the  aid  to  some 
private  enterprise  that  might  build  it.  It  was  known  that  if  the  United  States 
undertook  the  task  there  would  be  certain  attributes  of  sovereignty  connected 
with  it  from  which  it  was  utterly  impossible  for  this  country  to  divest  itself. 

Now,  all  these  things  were  present  in  the  minds  of  the  negotiators  of  this 
treaty.  Bearing  these  things  in  memory,  I  want  to  call  the  attention  of  the 
95272—12090 


36 

Senate  to  certain  phases  of  the  agreement  then  made.  First,  remember  that  the 
word  "  Nicaragua  "  is  not  in  the  treaty.  The  word  "  Panama  "  is  not  in  the 
treaty.  After  referring  to  the  convention  of  1850,  commonly  called  the  great 
Clayton-Bulwer  treaty;  it  says: 

And  to  that  end  to  remove  any  objection  which  may  arise  out  of  the  convention  of  the 
10th  April,  1850,  commonly  called  the  Clayton-Bulwer  treaty,  to  the  construction  of  such 
canal — 

Now,  the  canal  is  a  ship  canal  to  connect  the  Atlantic  and  Pacific  Oceans, 
without  any  definition  or  restriction  as  to  place — 

To  the  construction  of  such  canal  under  the  auspices  of  the  Government  of  the  United 
States,  without  impairing  "  the  general  principle  "  of  neutralization  established  in  article 
8  of  that  convention. 

It  is  of  interest,  then,  to  inquire  what  was  the  general  principle  of  neutrality 
recognized  and  established  in  the  convention  of  1850,  because  I  agree  that  it  was 
in  the  minds  of  the  representatives  of  both  Governments  to  preserve  the  general 
principle  of  neutralization. 

I  affirm  that  the  matter  of  tolls  and  charges  has  nothing  whatsoever  to  do 
with  the  general  principle  of  neutralization.  The  principle  of  neutralization 
here  referred  to  was  that  the  canal  which  was  about  to  be  built  by  the  Gov- 
ernment of  the  United  States  should  be  free  and  open  to  the  commerce  of  the 
world,  both  in  peace  and  in  war.  There  is  no  other  principle  of  neutralization 
that  can  possibly  be  applied  to  a  subject  of  this  sort ;  and  we  undertook  when 
we  affirmed  that  principle  that  both  in  peace  and  in  war  this  canal  should  be 
open  to  the  commerce  of  the  whole  world,  and  we  agreed  to  nothing  more.  That 
is  the  sum  and  substance  of  the  agreement  which  we  made  with  Great  Britain 
when  we  revoked  tby  express  terms  the  treaty  of  1850. 

I  have  great  respect  for  the  opinion  of  that  distinguished  statesman  whose 
report  was  read  by  the  Senator  from  North  Dakota  [Mr.  MCCUMBER]  this  after- 
noon, but  if  it  is  to  be  inferred  from  that  report  that  any  obligation  contained  in 
the  old  treaty  continued  after  the  new  treaty  was  made,  and  which  was  not 
renewed  in  the  treaty  of  1901,  then  I  must  dis&ent  from  his  construction  of  the 
transaction.  The  treaty  which  now  binds  the  United  States  expressly  says: 

The  high  contracting  parties  agree  that  the  present  treaty  shall  supersede  the  afore- 
mentioned convention  of  the  10th.  of  April,  1850. 

If  this  convention  superseded  the  old  one  it  is  impossible  to  conceive  how 
any  part  of  the  old  one  remains  in  force  unless  it  is  repeated  in  the  new  one. 
It  is  a  contradiction  in  terms,  and  without  a  close  examination  of  the  report 
to  which  the  Senator  from  North  Dakota  referred  I  am  bound  to  conclude  that 
it  does  not  bear  the  interpretation  which  that  distinguished  Senator  put  upon  it. 

Now,  let  us  see  what  we  agreed  to  do.  First,  we  agreed  to  set  aside  or  super- 
sede the  old  treaty  with  this  one.  Second — 

It  is  agreed  that  the  canal  may  be  constructed  under  the  auspices  of  the  Government 
of  the  United  States,  either  directly  at  its  own  cost  or  by  gift  or  loan  of  money  to  indi- 
viduals or  corporations,  or  through  subscription  to  or  purchase  of  stock  or  shares,  and 
that,  subject  to  the  provisions  of  the  present  treaty,  the  said  Government  shall  have  and 
enjoy  all  the  rights  incident  to  such  construction,  as  well  as  the  exclusive  right  of  pro- 
viding for  the  regulation  and  management  of  the  canal. 

The  Senator  from  North  Dakota  [Mr.  MC-CUMBER]  asked  this  afternoon  what 
interpretation  or  effect  should  be  given  to  the  phrase  "  subject  to  the  provisions 
of  the  present  treaty."  It  is  not  difficult  to  answer  that  question.  There  are 
agreements  on  the  part  of  the  United  States  in  this  treaty,  and  the  absolute 
sovereignty  and  control  and  management  of  the  canal  are  subject  to  the  limita- 
tions of  these  agreements. 

ARTICLE   3. 

The  United  States  adopts,  as  the  basis  of  the  neutralization  of  such  ship  canal,  the 
following  rules,  substantially  as  embodied  in  the  convention  of  Constantinople,  signed  the 
28th  October,  1888,  for  the  free  navigation  of  the  Suez  Canal ;  that  is  to  say — 

Remember  that  we  are  dealing  with  a  work  undertaken  by  the  Government 
of  the  United  States.  It  can  not  be  true  that  there  was  absent  from  the  minds 
of  the  men  who  made  this  the  possibility  that  the  United  States  would  not  only 
construct  the  canal,  but  would  become  the  owner  of  the  territory  through  which 
it  was  constructed.  That  was  one  of  the  things  that  the  United  States  might 
do  when  it  undertook  the  construction  of  the  canal.  I  do  not  know  how  clearly 
that  was  recognized,  but  I  do  know  that  the  makers  of  this  agreement  must 

95272—12000 


37 

have  anticipated  that  it  was  within  the  bounds  of  possibility  or  probability 
that  before  the  United   States  entered  upon  this  work  it  would  acquire  the 
sovereignty  of  the  territory  through  which  the  canal  was  to  be  constructed. 
It  declares  that — 

1.  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all 
nations  observing  these  rules,  on  terms  of  entire  equality,  so  that  there  shall  be  no  dis- 
crimination against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions 
or  charges  of  traffic  or  otherwise.  Such,  conditions  and  charges  of  traffic  shall  be  just 
and  equitable. 

I  venture  to  say  that  this  agreement  may  be  stated  in  this  way:  That  the 
canal  shall  be  open  to  commerce  in  both  peace  and  war,  and  that  the  charges 
which  we  place  upon  commerce  for  the  use  of  the  canal  shall  be  just  and 
equitable.  That  is  the  agreement  of  the  United  States ;  it  is  the  only  agree- 
ment that  has  been  made  by  the  United  States;  and  so  long  as  we  keep  the 
canal  open  for  the  use  of  the  world  and  so  long  as  we  charge  the  world  no 
more  than  fair  and  just  and  equitable  tolls,  so  long  we  shall  have  complied 
to  the  uttermost  with  our  obligations. 

I  pause  to  say  here  that  I  am  not  one  of  those  who  believe  that  if  we  were 
to  disagree  with  other  nations  of  the  world  as  to  whether  the  tolls  were 
equitable  or  fair,  it  would  present  a  controversy  that  would  be  settled  by 
arbitration.  I  deny  the  whole  scheme  of  arbitration  so  far  as  this  subject  is 
concerned. 

*  ****** 

Mr.  President,  I  said  that  our  agreement  with  the  world  was  that  we  would 
make  fair  and  equitable  charges  for  the  use  of  the  canal,  and  that  if  a  contro- 
versy arose  with  respect  to  that  question  it  ought  not  to  be  referred  to  arbi- 
tration; and  I  was  about  to  say  why.  At  the  bottom  of  all  judicial  procedure, 
as  the  underlying  principle  of  all  judicial  procedure,  we  insist  upon  an  im- 
partial tribunal,  a  tribunal  that  is  not  interested  in  the  outcome  of  the  con- 
troversy. If  we  call  a  jury  and  we  find  that  any  member  of  the  jury  is  inter- 
ested in  the  result  of  the  trial,  he  is  at  once  challenged ;  if  a  case  comes  before 
a  judge  who  found  to  be  interested  in  the  suit,  he  is  at  once  disqualified 
from  performing  his  function.  Therefore  any  international  controversy  in 
which  necessarily  the  representative  of  every  nation  on  the  face  of  the  earth 
is  interested  against  one  of  the  parties  to  the  controversy  can  iiot  be  submitted 
to  arbitration. 

******* 

But  I  pass  now  to  the  further  examination  of  what  this  contract  means. 
What  did  we  agree  to  do?  There  are  two  rules  of  interpretation  that  I  am 
sure  every  Senator  will  approve,  and  I  name  them :  First,  we  must  give  effect 
to  each  part,  some  effect  at  least,  so  that  each  part  will  be  in  reasonable  har- 
mony with  every  other  part;  and,  second,  the  construction  ought  to  be  one 
that  will  permit  its  observance  with  the  preservation  of  national  honor.  It  is 
incredible  to  me  that  we  will  put  an  interpretation  upon  this  agreement — as 
I  think,  a  strained  and  unnatural  interpretation — which  every  man  with  the 
least  patriotic  sense  and  with  the  least  pride  in  his  heart  for  the  country  of 
which  he  is  a  citizen  knows  the  country  will  not  observe. 

I  do  not  say  that  we  could  not  afford  to  pass  all  vessels  through  the  canal 
with  the  same  tolls.  We  could  afford  to  lose  the  money  without  the  least  suf- 
fering or  peril  upon  our  part,  but  the  interpretation  of  this  treaty  which  leads 
to  the  conclusion  that  we  can  not  discriminate  in  favor  of  our  own  shipping, 
carried  into  other  subjects,  would  rob  this  country  of  its  right  to  protect  itself, 
would  rob  it  of  its  dignity,  and  would  destroy  its  honor  as  a  nation  among  the 
free  nations  of  the  world.  We  can  not  say  that  we  are  included  within  these 
rules  or  within  the  phrase  "  all  nations  "  for  one  purpose  and  say  that  we  are 
not  within  that  phrase  for  other  purposes;  and  if  we  now  yield  to  the  demand 
of  Great  Britain  that  this  legislation,  which  is  based  upon  a  discrimination 
in  favor  of  our  own  shipping  is  in  contravention  of  the  treaty,  we  will  be  com- 
pelled to  yield  to  her  in  matters  that  will  involve,  or  that  may  involve,  the 
life  of  the  Nation,  or  we  will  then  be  compelled  to  conclude  that  we  are 
violating  our  solemn  promises. 

I  want  to  call  the  attention  of  the  Senator  to  some  things  that  this  will  do 
for  the  people  of  this  country,  and  to  some  things  that  show  to  my  mind  con- 
clusively that  it  was  not  intended  by  the  men  who  made  the  agreement  that  the 
same  terms  and  the  same  conditions  should  be  imposed  upon  our  shipping  that 
may  be  imposed  upon  the  shipping  of  foreign  powers. 
S5272— 12090 


38 

Let  us  see.  Most  of  these  things  have  been  mentioned  already,  but  I  want 
to  drive  them  home  now  if  I  can.  Everybody  admits  that  we  made  the  same 
agreement  with  regard  to  ships  of  war  that  we  have  made  with  regard  to  ships 
of  commerce,  and  that  if  we  have  agreed  to  charge  our  ships  of  commerce  the 
same  that  we  charge  other  ships  of  commerce,  then  we  have  agreed  to  charge 
our  ships  of  war  the  same  that  we  charge  other  ships  of  war. 

I  know,  of  course,  that  everybody  will  agree  that  we  can  not  do  that,  and 
everybody  says  that  must  be  eliminated  from  the  compact;  but  I  am  inquiring 
as  to  the  purpose  and  intent  of  the  people  who  used  this  language,  and  my 
argument  is  that  because  they  did  provide  that  there  should  be  the  same  pay- 
ment for  ships  of  war  and  that  the  conditions  should  be  the  same  for  these 
instruments  of  battle  as  are  provided  for  the  ships  of  commerce,  therefore  it  was 
not  in  the  minds  of  the  men  who  made  the  agreement  that  we  should  charge  our 
shipping  the  same  as  we  charge  other  shipping. 

We  all  agree,  do  we  not,  that  it  would  be  legally  impossible  for  the  United 
States  to  charge  for  the  transmission  of  our  ships  of  war  through  this  canal? 
If  there  is  a  Senator  here  who  can  tell  me  how  it  can  be  done,  I  will  be  obliged 
to  him.  I  say  that  it  is  legally  impossible  for  the  United  States  to  pay  itself 
for  the  passage  of  one  of  its  warships  through  this  canal.  It  is  contrary  to  the 
fundamental  principles  of  the  law  which  applies  to  that  subject.  A  man  can 
not  pay  himself.  A  nation  can  not  pay  itself.  If  this  Nation  were  to  pay 
$5,000  for  the  passage  of  the  Oregon  through  the  canal,  to  whom  would  it  pay 
it?  It  \vould  pay  the  United  States,  and  that  is  no  payment  at  all.  Therefore 
is  it  not  entirely  clear  that  those  who  used  this  language  did  not  intend  that  the 
United  States  should  be  among  those  nations  that  were  to  pay  the  same  for 
their  ships  of  war  and  ships  of  commerce? 

******* 

Mr.  President,  the  absurdity  of  requiring  the  captain  of  a  wrar  vessel  to  pay 
the  tolls  into  the  Treasury  of  the  United  States,  and  the  absurdity  of  calling 
that  a  payment,  would  be  duplicated  in  commerce. 

The  United  States  now  owns,  I  believe,  eight  ships  that  ply  between  New 
York  and  Colon.  The  United  States  is  directly  engaged  in  commerce.  I  know 
that  there  intervenes  the  form  of  a  corporation  known  as  the  Panama  Railroad 
&  Steamship  Co.,  but  that  is  a  mere  shadow.  It  does  not  touch  the  substance  of 
the  matter. 

Suppose  that  after  this  canal  is  finished  these  8  ships,  with  8  more  or  20 
more  that  the  United  States  may  buy  or  build,  shall  enter  the  carrying  trade 
between  New  York  and  San  Francisco  or  New  York  and  Valparaiso,  or  New 
York  and  any  other  port  on  the  western  shore.  There  is  no  reason  why  it 
should  not  be  done,  and  indeed  I  am  wholly  in  favor  of  doing  it  if  the  oppor- 
tunity does  not  attract  private  enterprise. 

We  intend  to  have  competition  through  that  canal ;  and  if  by  any  mischance 
competition  by  water  is  destroyed  or  fails  to  appear,  then  the  United  States  will 
be  carrying  commerce  between  our  eastern  and  our  western  shores.  And  let 
me  ask  whether  that  is  a  contingency  that  was  not  present  in  the  minds  of  the 
men  who  made  this  treaty?  The  other  nations  of  the  world  are  engaged  in 
transportation.  The  other  nations  of  the  world  have  gone  into  the  business  of 
common  carriers.  Why  should  not  the  United  States  go  into  that  business?  It 
is  the  tendency  of  the  times,  as  was  known  to  every  person  who  had  anything 
to  do  with  the  negotiation  of  this  treaty.  And  yet  if  that  contingency  was  in 
the  minds  of  the  men  who  made  this  treaty,  tell  me  how  these  ships  that  belong 
to  the  United  States  and  are  carrying  commerce  from  one  shore  to  the  other 
can  pay  the  United  States  for  passage  through  the  canal?  As  I  said  a  moment 
ago,  those  who  are  standing  for  the  interpretation  that  excludes  this  power  of 
the  Government  will  recoil  from  that  interpretation  when  they  face  the  fact 
that,  carried  to  its  logical  end,  it  substantially  forbids  the  United  States  to 
enter  this  trade.  And  if  that  be  the  interpretation,  then  we  have  agreed  with 
Great  Britain  that  never  will  we  charter  a  ship  and  send  that  ship  for  com- 
mercial purposes  through  the  Panama  Canal. 

The  conclusion  is  so  absurd — and  it  is  not  more  absurd  than  it  is  dangerous 
and  startling — that  the  American  people  will  not  endure  any  interpretation  of 
this  treaty  that  will  preclude  the  exercise  of  their  power  to  send  their  own 
ships,  both  in  commerce  and  for  war.  through  the  canal ;  and  they  can  not  send 
either  through  the  canal  if  the  interpretation  insisted  upon  here  is  to  be  the 
accepted  construction  of  our  agreement. 
95272—12090 


39 

I  think  we  ought  to  hesitate  a  long  while  before  we  agree  that  we  have  sur- 
rendered to  Great  Britain  or  to  the  rest  of  mankind  any  such  power  as  I  have 
described. 

But  that  is  not  all.  I  suppose  you  all  agree  with  me  that  as  to  the  citizens 
of  Great  Britain,  for  instance,  the  United  States  could  not  discriminate  as 
between  them.  Is  there  anyone  here  who  dissents  from  that  proposition? 

The  United  States  could  not  discriminate  between  citizens  of  Great  Britain 
or  France  or  Germany  or  Italy  or  any  other  nation  with  regard  to  their  traffic 
through  the  canal.  We  have  agreed  we  would  not  discriminate  between  their 
citizens.  We  have  agreed  that  we  wTould  give  them  all  an  even  opportunity, 
and  we  would  allow  them  all  to  enjoy  the  same  conditions.  If  this  is  to  bear 
the  construction  which,  has  been  put  upon  it,  then  we  have  agreed  that  we  will 
not  discriminate  among  our  own  citizens  with  regard  to  traffic  in  the  canal.  If 
this  be  true,  we  can  not  send  our  coastwise  ships  through  the  canal  at  one 
charge  and  our  ships  engaged  in  the  foreign  trade  subject  to,  another  charge.  We 
have  agreed  in  this  purely  domestic  matter,  a  thing  over  which  Great  Britain  has 
no  more  control  and  over  which  she  ought  not  to  have  any  more  control  than  she 
has  over  the  policies  of  heaven,  and  yet  we  have  surrendered  it  to  Great  Britain, 
and  we  have  given  to  the  courts  of  Europe  and  of  Africa  and  of  Asia  the  right 
to  say  what  we  shall  do  between  our  own  people  as  to  this  shipping. 

I  can  not  think  that  when  the  full  depth  of  the  sea  upon  which  these  men 
who  contend  for  the  other  interpretation  of  the  treaty  is  measured  that  there 
will  be  many  who  will  desire  to  embark  upon  that  sea. 

But  that  is  not  all.  It  has  been  said  here  more  than  once  that  this  interpreta- 
tion not  only  does  not  give  us  equality,  but  it  imposes  upon  us  clear  inferiority. 
There  is  not  a  lawyer,  there  is  riot  a  layman  here,  there  is  not  a  man  of  observa- 
tion and  sense,  who  will  not  agree  that  this  subterfuge  of  paying  tolls  into  the 
Treasury  of  the  United  States  and  having  those  tolls,  by  a  law  made  theretofore, 
returned  at  once  to  the  ships  that  paid  them  is  unworthy  of  a  great  Nation  like 
ours.  It  would  be  unworthy  of  an  individual.  It  would  be  unworthy  of  anyone 
who  values  substance  and  does  not  promote  form  above  the  reality.  We  can 
not,  if  we  have  agreed  that  there  shall  be  no  discrimination  by  any  form,  in  any 
form,  at  any  time,  return  these  tolls  to  the  ships  which  paid  them. 

We  could  do  that  if  there  was  no  understanding  beforehand.  If  there  was  no 
law  beforehand  for  the  return  of  the  tolls,  then  it  might  not  be  subject  to  the 
criticism  I  have  suggested ;  but  if  we  pass  a  law  that  all  American  ships  passing 
through  the  canal  shall  pay  these  tolls,  and  thereafter  the  Treasurer  of  the 
United  Spates  shall  return  to  the  ship  the  tolls  so  paid,  we  will  have  violated 
this  treaty,  under  the  interpretation  given  to  it  by  some  of  my  brother  Senators, 
just  as  completely  and  just  as  certainly  as  if  we  were  now  to  pass  a  law  that 
no  tolls  at  all  should  be  charged;  and,  besides  having  violated  the  treaty,  we 
would  have  exposed  ourselves  to  the  contempt  of  the  whole  world  for  endeavor- 
ing to  do  indirectly  a  thing  that  we  had  not  the  courage  to  do  directly;  and 
whatever  else  we  may  do,  let  us  at  least  preserve  a  reputation  for  doing  what- 
ever we  do  openly,  so  that  all  the  civilized  nations  may  understand  just  what 
we  are  doing. 

But  that  is  not  all.  England  will  return  to  her  ships  the  tolls  that  we  Im- 
pose, France  will,  Germany  will,  and  probably  all  the  nations  of  Europe  will, 
and  yet  we  will  be  tied  by  a  construction  of  the  treaty  which,  I  think,  does  as 
much  violence  to  its  language  as  it  does  violence  to  the  fundamental  rights  of 
American  citizens.  We  can  not  escape  from  the  situation  into  which  we  have 
been  forced  by  a  failure  to  boldly  assume  in  the  beginning  that  this  treaty  means 
what  it  says,  what  it  must  have  meant  in  the  minds  of  those  who  framed  it,  on 
account  of  the  considerations  to  which  I  am  now  calling  your  attention. 

But  again,  charges  are  no  more  required  to  be  equal  by  this  treaty  than  con- 
ditions. The  conditions  must  be  the  same.  Let  me  ask  the  Senator  from  Ohio 
[Mr.  BURTON],  who  is  to  answer  me,  what  he  thinks  of  this  case:  Suppose  the 
United  States  should  erect  docks  in  the  harbor  of  Cristobal  and  Balboa,  docks 
in  the  entrance  of  this  canal  for  the  accommodation  of  American  shipping?  He 
will  contend,  I  assume,  that  we  can  erect  no  dock  there  that  is  to  afford  a 
facility  for  an  American  citizen  or  an  American  ship  but  which  must  be  equally 
open  to  a  foreign  citizen  and  to  a  foreign  ship.  We  must  not  only  give  to  these 
nations  the  benefit  of  all  that  we  have  already  expended,  but  we  must  be  willing 
to  give  to  them  the  benefit  of  all  the  money  that  we  hereafter  will  expend  in 
order  to  encourage  and  stimulate  and  convenience  our  own  shipping.  If  there 

95272 — 12090 


40 

is  any  difference  between  conditions  and  charges  I  hope  tbat  those  who  follow 
me  will  be  able  to  point  it  out. 

Not  only  so,  we  have  a  bill  here  which  imposes  a  condition  upon  American 
ships  that  is  not  imposed  on  foreign  ships.  I  want  you  to  put  away  your  vary- 
ing opinions  with  regard  to  the  merits  of  the  proposition;  I  want  you  to  look 
at  it  only  to  inquire  whether  it  is  within  our  power.  This  bill  proposes  that 
no  American  ship  in  the  coastwise  trade  shall  pass  through  the  canal  if  it  be 
controlled  by  a  railway  company.  I  should  like  to  know  of  my  friends  upon  the 
other  side  whether  they  think  that  is  within  the  terms  of  the  treaty.  Have  we 
violated  our  engagements  with  Great  Britain  when  we  have  imposed  upon  our 
own  shipping  a  condition  of  this  character?  According  to  the  construction  of 
those  who  would  surrender  this  power  we  have  violated  it.  We  can  not  say 
as  to  our  own  shipping  that  it  must  be  free  and  independent,  unless  we  say  it 
as  to  the  whole  world. 

We  have  no  more  agreed  that  charges  shall  be  the  same  than  that  conditions 
shall  be  the  same.  I  want  to  know  whether  there  is  a  Senator  here  or  whether 
there  is  a  man  who  loves  his  country  within  the  borders  of  the  United  States 
who  will  be  willing  to  accede  to  the  suggestion  the  we  have  not  the  power  to 
impose  that  condition  upon  our  shipping. 

I  might  pursue  this  thought  indefinitely.  I  have  not  suggested  these  things 
to  Congress  in  order  to  escape  from  any  obligation  that  it  has  assumed.  I  for 
one  am  willing  to  bear  the  burden,  whatever  it  may  be,  but  I  am  not  willing 
that  Great  Britain  shall  say  what  that  burden  is.  I  have  mentioned  these 
things  in  order  to  convince  all  of  you  that  when  this  treaty  was  being  made  it 
is  utterly  impossible  to  conceive  that  our  Secretary  of  State  and  our  President 
and  our*  other  advisers  had  in  mind  or  could  have  had  in  mind  that  all  the 
charges  and  all  the  conditions  of  trade  through  the  canal  should  be  the  same 
as  to  foreign  and  domestic  shipping. 

I  repeat  the  one  thought,  and  that  is  that  we  have  engaged  with  Great  Britain 
and  through  Great  Britain  with  the  whole  world  that  this  canal  shall  be  open 
in  war  as^well  as  in  peace,  and  that  we  will  not  impose  upon  the  trade  of  the 
world  other  conditions  or  other  charges  than  those  which  are  fair  and  equitable 
under  all  the  circumstances  which  surround  trade  and  commerce. . 

But  I  take  one  step  further.  The  Senator  from  North  Dakota  said  in  a  tone 
of  triumph  the  other  day  that  it  was  plainly  evident  trom  the  second  para- 
graph of  article  3  that  all  these  obligations  had  been  assumed  by  the  United 
States,  and  that  it  was  and  is  one  of  the  nations  included  in  the  phrase  so  often 
quoted,  and  he  read,  "  The  canal  shall  never  be  blockaded  nor  shall  any  right 
of  war  be  exercised  nor  any  act  of  hostility  be  committed  within  it." 

I  want  those  Senators  who  are  experienced  in  the  language  of  diplomacy 
and  especially  experienced  in  the  terminology  of  war  to  tell  me  what  a  blockade 
is.  I  may  be  wrong,  but  as  I  understand  it  the  blockade  of  a  port  is  the  inter- 
vention of  ships  of  war  so  stationed  that  commerce  can  not  enter  the  port.  It 
is  a  measure  that  is  adopted  by  one  power  against  another  with  which  it  may 
be  at  war. 

Tell  me  if  you  will  whether  our  distinguished  Secretary  of  State,  if  he  had 
desired  to  say  that  the  United  States  shall  keep  this  canal  open  for  commerce, 
would  have  said  the  United  States  shall  not  blockade  this  canal?  It  is  impos- 
sible to  conceive  of  the  use  of  those  words,  if  that  be  the  intent.  The  United 
States  could  not  blockade  this  canal  any  more  than  it  could  blockade  one  of  its 
own  ports  of  which  it  was  in  full  possession.  The  United -States  is  in  possession 
of  the  Panama  Canal ;  in  possession  of  its  10-mile  territory  that  adjoins  it ;  in 
possession  of  its  locks ;  in  possession  of  every  facility  that  makes  it  usable  by 
the  commerce  of  the  world.  If  the  United  States  desired  to  arrest  the  opera- 
tions of  the  canal  and  prevent  commerce  from  passing  through  the  canal,  it 
would  not  blockade  the  canal.  It  could,  by  the  turning  of  a  screw,  destroy  the 
canal  for  use  in  a  commercial  way  or  in  a  warlike  way  either.  Without  its 
will  not  a  single  ship  could  pass  through  the  canal. 

Therefore,  will  you  say  to  me  that  when  John  Hay  was  using  the  language 
here  employed  he  intended  to  say  that  the  United  States  should  never  blockade 
the  canal?  No;  he  said  the  canal  should  never  be  blockaded,  and  it  is  for  us 
to  see  that  it  never  shall  be  blockaded.  We  have  agreed  to  maintain  the  canal 
so  that  it  can  be  used  by  all  the  world,  and  if  any  nation  shall  attempt  to  pre- 
vent the  ingress  or  the  egress  of  vessels  through  the  canal  upon  peaceful  errands 

95272—12090 


41 

it  is  the  solemn  obligation  of  tlie  United  States  to  see  that  that  effort  does  not 
succeed  and  that  there  shall  be  110  blockade  of  these  waters. 

Again,  if  it  was  intended  by  the  distinguished  Secretary  of  State  that  his 
own  country  should  be  one  of  the  nations  upon  which  all  these  rules  are  to  rest, 
then  we  are  one  of  the  belligerents  mentioned,  in  the  other  paragraphs  of  the 
rule.  The  third  one  reads  thus: 

3.  Vessels  of  war  of  a  belligerent  shall  not  revictual  nor  take  any  stores  in  the  canal 
except  so  far  as  may  be  strictly  necessary:   and  the  transit  of  such  vessels  through  the 
canal   shall  be   effected  with   the  least  possible   delay  in   accordance  with  the  regulations 
in  force,  and  with  only  such  intermission  as  may  result  from  the  necessities  of  the  service. 

Neutralization  does  not  involve  the  provision  which  I  have  just  read  so  far 
as  occupation  by  the  United  States  is  concerned. 

I  repeat,  as  I  have  said  often,  we  have  undertaken  that  these  waters  shall  be 
open  for  the  commerce  of  the  world.  I  can  easily  understand  the  application 
of  that  rule.  If  Great  Britain  were  at  war  with  France  these  are  then  neutral 
waters.  The  ships  of  neither  would  be  allowed  to  remain  longer  than  the 
appointed  time  in  or  near  the  canal.  Neither  of  the  ships  would  be  permitted 
to  take  on  other  stores  than  the  laws  of  war  permit,  and  the  treaty  becomes 
intelligible  and  can  be  executed  with  honor  and  for  the  welfare  of  all  the  people. 

But  suppose  that  the  United  States  is  one  of  the  belligerents;  we  have  a 
territory  there  10  miles  wide  and  a  canal  through  it.  We  have  acquired  the 
one  and  constructed  the  other  at  immense  cost,  and  the  sovereignty  of  the 
United  States  is  supreme  over  both.  Do  you  think  that  any  representative  of 
the  Government  of  the  United  States  has  ever  agreed  that  under  those  circum- 
stances a  canal  so  built,  with  a  sovereignty  so  exercised,  that  one  of  our  own 
ships  of  war.  when  this  Nation  is  a  belligerent,  must  hasten  through  this  canal, 
taking  no  other  provision  than  would  be  allowed  to  a  foreign  ship  and  leaving 
it  defenseless,  if  you  please,  against  the  belligerent  with  which  we  might  be 
at  war? 

If  any  Secretary  of  State  ever  so  dreamed  it  must  have  been  at  a  time  when 
he  had  forgotten  all  the  traditions  of  the  race  to  which  he  belonged,  and  if  any 
Congress  ever  decides  and  proclaims  that  the  United  States  can  not  use  this 
cannl  for  her  ships  of  war  wrhen  her  life  is  at  stake,  that  Congress  will  go  down 
in  history  under  the  universal  detestation  of  a  liberty-loving  land. 

**#**** 

Finally,  I  desire  to -read  another  paragraph  of  the  treaty: 

4.  No    belligerent    shall    embark    or    disembark    troops,    munitions   of   war,    or    warlike 
materials  in  the  canal,  except  in  case  of  accidental  hindrance  of  the  transit,  and  in  such 
case  the  transit  shall  be  resumed  with  all  possible  dispatch. 

5.  The  provisions  of  this  article  shall  apply  to  waters  adjacent  to  the  canal  within  3 
marine   miles   of  either  end.      Vessels  of  war  of   a  belligerent  shall   not  remain   in   such 
waters  longer  than  24  hours  at  any  one  time,  except  in  case  of  distress,  and  in  such  case 
shall  depart  as  soon  as  possible  ;  but  a  vessel  of  war  of  one  belligerent  shall  not  depart 
within  24  hours  from  the  departure  of  a  vessel  of  war  of  the  other  belligerent. 

This  reading  simply  intensifies  the  observations  I  have  already  made  with 
respect  to  the  canal.  Is  there  an  American  anywhere  who  believes  that  we 
ever  agree  in  time  of  war  to  treat  our  ships  and  our  men  and  the  means  for 
our  safety  in  the  way  pointed  out  in  this  treaty?  The  statement  of  the  case 
is  the  best  argument  that  I  can  make  upon  it. 

I  hope,  of  course,  that  war  will  never  come.  I  am  not  saying  these  things 
because  I  believe  it  is  imminent.  I  am  saying  them  to  test  the  mind  of  the 
ninn  who  made  this  agreement  for  the  United  States,  and  I  am  saying  them 
for  the  purpose  of  removing  any  doubt  that  may  be  in  the  Senate  in  regard  to 
what  was  intended  by  this  treaty. 

We  will  do  injustice  to  his  memory  if  we  attach  to  him  the  imputation  of 
having  surrendered  to  Great  Britain  or  to  the  world  these  priceless,  these  in- 
valuable rights  for  the  maintenance  of  our  dignity  and  the  preservation  of 
our  safety.  I  for  one  will  not  believe  that  he  ever  intended  to  commit  the 
American  Government  to  a  course  so  perilous  and  as  I  was  about  to  sav,  so 
weak  and  so  cowardly. 

I  desire  to  fulfill  the  treaty  according  to  its  letter  and  its  spirit  as  well,  and 
I  regret  more  than  I  can  express  that  these  differences  of  opinion  have  entered 
the  minds  of  Senators.  It  seems  to  me  that  we  ought  to  stand  as  one  man  for 
a  construction  of  this  treaty  which  is  not  only  demanded  by  its  terms  but  by 
every  consideration  of  national  safety  and  honor  as  well. 
95272 — 12000 


42 

FROM   SPEECH  OF   HON.   WESLEY  L.   JONES,   OF   WASHINGTON,   IN 

THE  SENATE  OF  THE   UNITED  STATES  AUGUST  6,    1912. 

Mr.  JONES.  Mr.  President,  the  United  States  owns  a  strip  of  territory 
across  the  Isthmus  of  Panama  10  miles  wide.  It  is  ours  by  grant  from  the 
Republic  of  Panama ;  no  one  disputes  our  title  and  no  one  can  dispute  it.  Over 
it  flies  the  flag  of  the  Republic  representing  the  sovereignty  and  proprietorship 
of  the  Nation  just  as  it  represents  that  sovereignty  and  proprietorship  over  any 
other  territory  belonging  to  the  United  States,  We  have  established  a  govern- 
ment. Order  is  maintained;  our  courts  administer  justice;  civil  rights  are 
enforced,  and  all  the  rights  and  powers  of  sovereignty  are  being  exercised. 

Through  and  across  this  strip  of  territory,  and  wholly  within  its  limits,  we 
are  building  with  our  people's  money,  and  will  soon  have  completed,  a  great 
canal  through  which  will  pass  much  of  the  world's  commerce.  *  *  * 

Some  contend,  however,  that  although  we  bought  the  territory,  built  the  canal, 
and  own  them  both,  we  must  use  the  canal  for  the  benefit  of  others  and  to  the 
disadvantage  of  ourselves  and  our  own  people.  Is  this  so?  Can  we  exercise 
only  those  rights  of  a  sovereign  and  of  a  proprietor  that  benefit  other  nations 
at  the  expense  of  our  own  people  and  deny  them  the  privileges  and  benefit 
which  every  sovereign  and  proprietor  ordinarily  can  extend  to  his  own?  If  I 
believed  that  we  were  limited  in  our  treatment  of  our  own  people  and  our  own 
vessels,  as  some  have  contended,  I  would  not  discuss  the  question  in  open  ses- 
sion, but  if  I  felt  compelled  to  advocate  such  a  position,  I  would  do  it  only  in 
executive  session,  where  no  record  would  be  made  that  could  be  used  against 
our  Government  and  people  in  any  controversy  that  may  hereafter  arise.  I  do 
not  say  this  in  criticism  of  those  who  have  publicly  discussed  and  advocated 
this  side  of  the  controversy,  but  simply  as  expressing  my  own  views  as  to  the 
proper  action  to  take.  In  any  controversy  that  may  arise  between  our  Govern- 
ment and  a  foreign  power,  where  there  is  room  for  doubt  I  will  never  admit  that 
my  Government  is  in  the  wrong  except  within  the  secret  walls  of  this  historic 
Chamber. 

In  my  judgment,  however,  we  can  use  this  territory  and  this  canal  just  as 
we  can  use  any  other  territory  or  any  other  waterway  of  the  country.  We  can 
permit  our  ships  and  our  people  to  use  it  and  occupy  it  just  as  we  permit  them 
to  use  any  of  our  other  waterways  or  territory.  This  is  denied,  however,  be- 
cause of  a  treaty  between  this  Government  and  Great  Britain,  under  which  it  is 
claimed  that  we  can  not  permit  our  own  people  to  use  this  canal  except  upon 
exactly  the  same  terms  that  we  allow  the  people  of  Great  Britain  and  other 
nations  to  use  it.  The  American  people  are  jealous  of  their  rights,  but  they 
also  hold  sacred  their  promise. 

However  unfair  and  however  burdensome  any  treaty  solemnly  made  and 
ratified  may  be,  it  will  be  sacredly  kept  until  abrogated,  and  I  yield  to  no  one 
in  upholding  at  any  cost  the  Nation's  honor. 

Is  there  any  treaty  that  restricts  our  power  to  permit  the  use  of  this  canal 
by  our  own  people  upon  such  terms  as  we  see  fit  to  impose?  Could  any  treaty 
be  made  that  limits  and  restricts  the  power  and  right  of  the  Government  to 
deal  with  its  own  people  and  its  own  property?  In  niy  judgment  the  treaty- 
making  power  can  not  take  away  or  cede  away  this  right.  The  Senate  and  the 
President  can  not  deprive  the  United  States  of  any  of  its  rights  of  sovereignty, 
and  that  is  what  this  would  be  doing.  If  it  be  said  that  this  is  not  ceding 
away  sovereign  rights,  but  it  is. giving  or  granting  proprietary  rights,  I  say 
this  can  not  be  done  by  the  President  and  the  Senate  in  the  exercise  of  the 
treaty-making  power.  The  right  to  use  our  canal  and  the  territory  through 
which  it  runs  as  we  may  desire  is  a  property  right,  and  the  establishment  of 
rules  respecting  the  use  of  this  canal  is  the  establishment  of  rules  in  respect 
to  the  property  or  territory  of  the  United  States,  and  under  section  3,  Article 
IV,  of  the  Constitution  only  "  the  Congress,"  and  not  the  Senate  and  the  Presi- 
dent, "  shall  have  power  to  dispose  of  and  make  all  needful  rules  and  regula- 
tions respecting  the  territory  or  other  property  belonging  to  the  United  States." 
Any  treaty  purporting  to  make  rules  and  regulations  respecting  that  canal  or 
the  territory  through  which  it  passes  and  purporting  to  restrict  its  use  by  the 
United  States  is  beyond  the  power  of  the  President  and  the  Senate  and  not  bind- 
ing upon  the  Government  or  the  people  of  the  United  States.  It  will  not  be  pre- 
sumed that  an  attempt  was  made  to  do  what  there  was  no  constitutional  power 
to  do. 

95272—12090 


43 

Does  the  Hay-Pauncefote  treaty  assume  to  deprive  us  of  our  right  to  deal 
with  and  treat  our  own  ships  in  the  use  of  our  own  canal  as  we  deem  best?  I 
do  not  think  so.  Surely,  no  one  will  contend  that  the  President  and  Mr.  Hay, 
who  negotiated  that  treaty,  and  the  Senate,  which  ratified  it,  intended  to  give 
up  our  right  to  allow  our  own  ships  to  use  our  own  canal  and  our  own  territory 
as  we  might  deem  best.  They  were  patriotic  men,  devoted  to  the  welfare  of 
our  country  and  jealous  of  its  rights  and  the  rights  of  its  citizens,  and  I  will 
not  believe  that  they  intended  anything  of  the  sort.  If  the  people  of  this 
country  believed  that  they  intended  to  give  up  such  rights,  no  words  could  ex- 
press their  indignation,  and  such  a  deliberate  intention  would  be  regarded  as 
little  short  of  faithlessness  to  the  great  trust  reposed  in  them.  If  they  had 
thought  so  when  this  treaty  was  pending,  such  a  wave  of  indignation  would 
have  swept  the  country  as  would  have  buried  such  treaty  in  oblivion.  I  am 
sure,  and  the  people  believe,  that  they  simply  agreed  that  the  United  States 
would  treat  all  nations  with  absolute  impartiality,  and 'insure  equal  treatment 
among  them  without  depriving  itself  of  any  of  its  sovereign  or  proprietary  rights 
and  without  recognizing  the  right  of  any  people  to  interfere  or  question  its 
treatment  of  its  own  people  in  regard  to  its  own  property  and  territory. 

Ever  since  Balboa  stood  on  the  crest  of  the  Cordilleras  at  the  Isthmus  of 
Panama  and  gazed  upon  the  placid  waters  of  the  Pacific  the  people  of  the  world 
have  dreamed  of  a  canal  across  the  Isthmus  connecting  the  two  oceans.  From 
the  independence  of  the  Spanish-American  Republics  the  American  people  have 
interested  themselves  in  this  great  undertaking.  In  1835  the  Senate  instructed 
the  President  to  enter  into  negotiations  with  the  Governments  of  Central 
America  and  New  Granada,  with  the  view  of  affording  protection  to  individuals 
or  companies  proposing  to  construct  such  a  canal  and  to  insure  the  free  use  and 
navigation  of  it  to  all  nations.  The  Nicaragua  route  came  into  favor,  and 
franchises  were  secured  by  various  parties  looking  to  the  construction  of  such 
canal  through  Nicaragua!!  territory.  Prior  to  1850  Great  Britain  asserted  a 
claim  to  a  protectorate  over  the  Mosquito  coast  country.  Gold  was  discovered 
in  California,  and  renewed  interest  in  the  canal  was  taken  by  the  United  States. 
In  1850  the  Clayton-Bulwer  treaty  was  made  and  ratified. 

This  treaty,  by  express  terms,  had  reference  only  to  the  canal  to  be  con- 
structed "  by  the  way  of  the  River  San  Juan  de  Nicaragua  and  either  or  both  of 
the  lakes  of  Nicaragua  or  Managua  to  any  port  or  place  on  the  Pacific  Ocean," 
but  it  recognized  in  the  eighth  section  the  possibility  of  the  construction  of  such 
canal  by  way  of  Tehauntepec  or  Panama.  This  treaty  did  not  contemplate  the 
construction  of  the  canal  by  either  Government,  but,  on  the  contrary,  expressly 
declared  that  neither  the  United  States  nor  Great  Britain  "  will  ever  obtain  or 
maintain  for  itself  any  exclusive  control  over  the  said  ship  canal."  No  forti- 
fications were  to  be  erected  or  maintained  by  either  Government  in  connection 
with  or  in  the  vicinity  of  the  canal,  nor  was  either  Government  to  acquire  any 
rights  or  advantages  for  itself  or  its  citizens  in  regard  to  commerce  or  naviga- 
tion through  the  said  canal  not  enjoyed  by  the  other.  Both  Governments  obli- 
gated themselves  to  protect  any  persons  constructing  the  canal  from  "  unjust 
detention,  confiscation,  seizure,  or  any  violence  whatsoever." 

Article  5  of  this  treaty  reads  as  follows : 

The  contracting  parties  further  engage  that  when  the  said  canal  shall  have  been  com- 
pleted they  will  protect  it  from  interruption,  seizure,  or  unjust  confiscation,  and  that  they 
will  guarantee  the  neutrality  thereof,  so  that  the  said  canal  may  forever  be  open  and 
free  and  the  capital  invested 'therein  secure.  Nevertheless,  the  Governments  of  the  United 
States  and  Great  Britain,  in  according  their  protection  to  the  construction  of  the  said 
canal  and  guaranteeing  its  neutrality  and  security  when  completed,  always  understand 
that  this  protection  and  guaranty  are  granted  conditionally  and  may  be  withdrawn  by 
both  Governments  or  either  Government,  if  both  Governments  or  either  Government  should 
deem  that  the  persons  or  company  undertaking  or  managing  the  same  adopt  or  establish 
such  regulations  concerning  the  traffic  thereupon  as  are  contrary  to  the  spirit  and  in- 
tention of  this  convention,  either  by  making  unfair  discriminations  in  favor  of  the  com- 
nu'i'ec  of  one  of  the  contracting  parties  over  the  commerce  of  the  other  or  by  imposing 
oppressive  exactions  or  unreasonable  tolls  upon  the  passengers,  vessels,  goods,  wares,  mer- 
chandise, or  other  articles.  Neither  party,  however,  shall  withdraw  the  aforesaid  pro- 
tection and  guaranty  without  first  giving  six  months'  notice  to  the  other. 

In  other  words,  the  United  States  and  Great  Britain  guarantee  the  neutrality 
of  any  such  canal,  but  such  neutrality  and  equal  use  are  granted  conditionally 
upon  equal  obligations,  and  either  Government  might  withdraw  from  such  obli- 
gations if  those  managing  the  canal  should  make  "  unfair  discrimination  ''  or 
impose  "  oppressive  exactions  or  unreasonable  tolls/' 
95272—12090 


44 

It  will  be  noted  that  under  article  5  the  United  Slates  and  Great  Britain 
simply  provide  for  securing  fair  and  equal  treatment  to  themselves  by  those 
operating  the  cannl.  In  order,  however,  that  other  nations  might  have  the 
benefit  of  the  canal  upon  equal  terms,  but  also  with  equal  obligations,  article  6 
obligated  the  contracting  parties  "to  invite  every  State  with  which  both  or 
either  have  friendly  intercourse  to  enter  into  stipulations  with  them  similar  to 
those  which  they  have  entered  into  with  each  other,  to  the  end  that  all  other 
States  may  share  in  the  honor  and  advantage  of  having  contributed  to  a  work 
of  such  general  interest  and  importance  as  the  canal  herein  contemplated." 

Article  8  is  as  follows : 

The  Governments  of  the  United  States  and  Great  Britain  having  not  only  desired,  in 
entering  into  this  convention,  to  accomplish  a  particular  object,  but  also  to  establish  a 
general  principle,  they  hereby  agree  to  extend  their  protection,  by  treaty  stipulations,  to 
any  other  practicable  communications,  whether  by  canal  or  railway,  across  the  Isthmus 
which  connects  North  and  South  America,  and  especially  to  the  interoceanic  communica- 
tions, should  the  ^ame  pr.oye  to  be  practicable,  whether  by  canal  or  railway,  which  are 
now  proposed  to  be  established  by  the  way  of  Tehuantepec  or  Panama.  In  granting, 
however,  their  joint  protection  to  any  such  canals  or  railways  as  are  by  this  article 
specified,  it  is  always  understood  by  the  United  States  and  Great  Britain  that  the  prrties 
constructing  or  owning  the  same  shall  impose  no  other  charges  or  conditions  of  traffic 
thereupon  than  the  aforesaid  Governments  shall  approve  of  as  .inst  and  equitable;  anc 
that  the  same  canals  or  railways,  being  open  to  the  citizens  and  subjects  of  the  Unitec 
States  and  Great  Britain  on  equal  terms,  shall  also  be  open  on  like  terms  to  the  citizens 
and  subjects  of  every  other  State  which  is  willing  to  grant  thereto  such  protection  as  the 
United  States  and  Great  Britain  engage  to  afford. 

This,  in  brief,  is  the  Clayton-Btilwer  treaty  made  in  1850.  It  is  not  worth 
while  here  to  discuss  why  any  recognition  was  given,  if  given,  to  the  claims  of 
Great  Britain  in  Nicaragua  or  the  Mosquito  Coast  country  contrary  to  the  Mon- 
roe doctrine.  Nothing  was  said  concerning  such  claims  in  this  treaty,  but  it 
did  recognize  for  some  reason  or  other  Great  Britain's  interest  in  the  construc- 
tion of  a  canal  connecting  the  two  oceans,  and  Great  Britain  and  the  United 
States  assumed  equal  obligations  in  relation  to  such  canal  and  were  to  receive 
equal  treatment.  The  canal  was  to  be  constructed  through  territory  foreign  to 
both  of  these  Governments,  and  was  to  be  constructed  by  private  parties  or  com- 
panies. Both  nations  were  desirous  that  such  canal  should  be  constructed  and 
were  anxious  to  further  such  construction  in  every  way  possible.  The  objecl 
of  this  treaty  was  to  promote  the  construction  of  the  canal  by  encouraging 
assisting,  and  protecting  those  who  were  engaged  in  the  great  enterprise  and  to 
insure  its  neutrality  wherever  located  and  to  guarantee  equal  treatment  by 
those  operating  the  canal  to  all  nations  entering  into  stipulations  similar  to 
those  between  Great  Britain  and  the  United  States.  The  treaty  was  entered 
into  "  to  accomplish  a  particular  object " ;  that  is,  the  construction  of  a  canal 
connecting  the  waters  of  the  two  oceans,  and  also  to  establish  "  a  general  prin- 
ciple " ;  that  is,  that  such  canal,  wherever  constructed,  should  be  a  neutra] 
canal  as  among  all  nations  entering  into  stipulations  similar  to  those  agreed 
to  between  Great  Britain  and  the  United  States. 

After  the  ratification  of  the  Clayton-Bulwer  treaty  various  steps  were  taken 
and  various  enterprises  inaugurated  looking  toward  the  construction  of  this 
canal.  In  June,  1867,  after  the  close  of  the  Civil  War,  a  treaty  was  concluded 
between  the  United  States  and  Nicaragua  by  which  the  citizens  of  the  United 
States  were  to  have  free  transit  over  any  canal  constructed  under  the  authority 
of  the  Government  of  Nicaragua.  From  1872  until  1882  almost  every  possible 
route  across  the  Isthmus  was  surveyed  by  engineers  of  the  United  States  Navy, 
and  in  1876  a  report  favoring  the  Nicaraguan  route  was  made  by  a  commission 
of  military  and  naval  engineers  appointed  by  President  Grant  in  compliance 
with  a  Senate  resolution.  An  international  congress  held  at  Paris  in  1879 
decided  in  favor  of  the  Panama  route.  In  1884  a  treaty  was  concluded  between 
the  United  States  and  Nicaragua  by  which  the  United  States  was  to  build  the 
canal,  to  be  owned  jointly  by  the  two  powers.  This  treaty  was  never  ratified 
De  Lesseps's  attempt  to  construct  the  canal  at  Panama  had  been  a  disastrous 
failure.  In  1887  a  Nicaragua  Canal  Assocition  secured  from  Nicaragua  a  con- 
cession granting  the  exclusive  privilege  of  constructing  and  operating  a  canal. 
Surveys  were  made  and  the  line  of  the  canal  definitely  fixed,  and  in  1889  Con- 
gress granted  a  charter  of  incorporation  to  the  company.  After  the  expendi- 
ture of  about  $2,000,000  operations  ceased  in  1893,  owing  to  the  lack  of  funds 
and  the  failure  of  Congress  to  guarantee  the  bond  issue.  Congress  provided  for 
various  commissions  to  report  upon  the  feasibility  and  cost  of  constructing 
canal  through  Nicaragua,  and  these  commissions  reported  favorably  upon  the 
Nicaraguan  route  and  made  an  estimate  of  the  cost  of  the  same, 
95272—12090 


45 

In  the  meantime  an  international  commission  of  experts  made  a  report  upon 
the  feasibility  of  constructing  the  canal  across  the  Isthmus  of  Panama  and  the 
whole  matter  was  submitted  in  1889  to  a  new  commission  provided  by  Con- 
gress, which,  after  a  very  exhaustive  investigation  of  all  the  routes,  recom- 
mended the  Nicaragnan  route  simply  on  account  of  the  financial  difficulties  in 
the  way  of  acquiring  the  property  of  the  Panama  Canal  Co.  These  difficulties 
were  eventually  overcome,  and  Congress  finally  adopted  the  Panama  route  with 
the  understanding  that  the  Nicaraguan  route  should  be  reverted  to  in  case  a 
satisfactory  title  could  not  be  secured  to  the  Panama  property  and  the  neces- 
sary concessions  from  the  Government  of  Colombia. 

The  Nicaragua  Canal  Association  ceased  its  operations  in  1893,  and  any  hope 
that  had  existed  of  any  private  parties  or  company  constructing  this  canal 
was  dissipated,  and  it  was  generally  accepted  that  if  the  canal  was  to  be  built, 
it  would  have  to  be  done  by  the  United  States  or  by  some  company  or  associa- 
tion supported  by  the  United  States.  The  people  were  insistent  that  the  canal 
be  built  and,  as  I  already  have  said,  various  Government  commissions  had  made 
investigations  and  reports  and  recommendations.  There  was  no  thought  of  the 
United  States  acquiring  territory  across  the  Isthmus,  but  negotiations  were 
had  looking  to  concessions  to  the  United  States  under  which  the  canal  might  be 
constructed  through  the  countries  granting  such  concessions. 

While  but  little  attention  had  been  paid  to  the  Clayton-Bulwer  treaty,  it  had 
never  been  formally  abrogated.  Under  that  treaty  the  Governments  of  the 
United  States  and  Great  Britain  had  declared  that  neither  would  "  ever  obtain 
or  maintain  for  itself  any  exclusive  control "  over  any  canal  constructed 
across  the  Isthmus.  It  had  become  evident  that  the  United  States  must  con- 
struct the  canal  or  guarantee  its  construction,  and  in  so  doing  it  would  be 
necessary  for  it  to  have  exclusive  control  over  it.  The  abrogation  of  the 
Clayton-Bulwer  treaty  was  sought  by  the  United  States.  That  treaty,  if  it 
amounted  to  anything,  was  solely  a  hindrance  to  the  construction  of  the  canal. 
It  was  of  no  benefit  to  England,  whose  pretensions  to  the  Mosquito  coast  and 
Nicaragua  at  the  time  had  long  since  lapsed.  In  consenting  to  its  abrogation 
England  gave  up  nothing  except  the  pretext  of  obstructing  the  building  of  the 
canal  by  the  United  States  if  it  desired  to  do  so.  While  some  contend  that 
Great  Britain  made  or  gave  up  valuable  concessions  in  the  abrogation  of  the 
Clayton-Bulwer  treaty,  and  while  they  may  be  right,  I  can  not  myself  agree  to 
this.  At  any  rate,  the  Clayton-Bulwer  treaty  was  expressly  abrogated  by  the 
treaty  of  November  18,  1901,  transmitted  by  President  Roosevelt  to  the  Senate 
December  4,  1901,  and  ratified  December  16,  1901.  by  a  vote  of  72  yeas  and 
6  nays.  This  treaty  is  known  as  the  Hay-Pauncefote  treaty. 

This  treaty  was  expressly  declared  in  its  preamble  to  be  for  the  purpose  of 
facilitating  the  construction  of  the  canal  to  connect  the  Atlantic  and  Pacific 
Oceans  by  whatever  route  might  be  considered  expedient  and  "  to  remove 
any  objection  which  may  arise  out  of  the  convention  of  the  19th  of  April,  1850, 
commonly  called  the  Clayton-Bulwer  treaty,  and  the  construction  of  such  canal 
under  the  auspices  of  the  Government  of  the  United  States,  without  impairing 
the  'general  principle'  of  neutralization  established  in  article  8  of  that  con- 
vention." This  treaty  expressly  superseded  the  Clayton-Bulwer  treaty. 

Article  2  of  this  treaty  reads  as  follows: 

It  is  agreed  that  the  canal  may  be  constructed  under  the  auspices  of  the  Government 
of  the  United  States  either  directly  at  its  own  cost  or  by  gift  or  loan  of  money  to  indi- 
viduals or  corporations  or  through  subscription  to  or  purchase  of  stock  or  shares,  and 
that,  subject  to  the  provisions  of  the  present  treaty,  the  said  Government  shall  have  and 
enjoy  all  the  rights  incident  to  such  construction,  as  well  as  the  exclusive  rigut  of 
providing  for  the  regulation,  and  management  of  the  canal. 

From  this  it  will  be  seen  that  the  United  States  was  at  liberty,  without 
any  possible  objection  upon  the  part  of  Great  Britain,  to  proceed  with  the 
construction  of  the  canal  directly  at  its  own  cost  or  by  gift  or  loan  to  indi- 
viduals or  corporations  or  through  subscription  to  or  purchase  of  stock  or 
shares.  Great  Britain  was  relieved  of  any  and  all  obligations  in  connection 
with  the  construction  of  the  canal  and  from  all  obligations  for  the  protection 
of  anyone  constructing  the  canal.  She  also  was  relieved  from  any  obligation 
whatever  to  protect  the  canal  when  constructed  or  in  guaranteeing  its  neutrality. 

The  only  provision  of  the  Clayton-Bulwer  treaty  that  was  retained  was  the 
"  general  principle "  of  neutralization  established  in  article  8  of  that  conven- 
tion, and  that  "  general  principle  "  was  that  the  canal  should  be  open  on  equal 
terms  to  all  nations  having  equal  obligations  in  connection  with  the  canal ;  and, 
as  the  United  States  assumed  all  the  obligations  in  connection  with  the  con- 
95272—12090 


46 

struetion,  maintenance,  operation,  and  protection  of  tlie  canal,  this  "  general 
principle"  simply  meant  that  under  this  treaty  the  United  States  was  to  give 
all  other  nations  equal  terms  in  connection  with  the  use  of  this  canal. 

Those  contending  that  this  canal  under  the  Hay-Pauncefote  treaty  must 
be  open  to  vessels  of  all  nations,  including  the  vessels  of  the  United  States, 
on  equal  terms,  it  seems  to  me,  overlook  the  essence  of  the  "  general  principle  " 
set  forth  in  section  8  of  the  Clayton-Bulwer  treaty,  as  well  as  that  the  canal 
"  shall  also  be  open  on  like  terms  to  the  citizens  and  subjects  of  every  other 
State  which  is  willing  to  grant  thereto  such  protection  as  the  United  States 
and  Great  Britain  engage  to  afford."  Keeping  this  in  mind  as  the  essence  of 
the  "  general  principle "  referred  to,  it  seems  to  me  to  be  absolutely  conclu- 
sive that  under  the  new  treaty  the  only  obligation  placed  upon  the  United 
States  by  this  "  general  principle "  was  that  the  other  nations  of  the  world 
and  their  citizens  should  be  treated  exactly  alike  in  the  use  of  the  canal. 

It  is  significant  in  this  connection  that  the  original  draft  of  the  Hay-Paunce- 
fote treaty,  as  transmitted  to  the  Senate  by  President  McKinley,  obligated 
Great  Britain  as  well  as  the  United  States  to  maintain  the  neutralization  of  the 
canal  under  certain  rules  prescribed  in  the  treaty,  and  article  3  provided  as 
follows : 

The  high  contracting  parties  will  immediately  upon  the  exchange  of  the  ratifications 
of  this  convention  bring  it  to  the  notice  of  the  other  powers  and  invite  them  to  adhere 
to  it. 

This  provision  was  stricken  out  in  the  Senate.  In  view  of  the  fact  that 
England  had  bound  herself  to  neutral  conduct  in  connection  with  the  canal, 
she  objected  to  the  release  of  other  nations  from  these  obligations. 

In  connection  with  the  negotiations  with  reference  to  the  action  of  tlie 
Senate  in  striking  out  this  article,  Lord  Lansdowne  submitted  a  memorandum, 
under  date  of  August  3,  1901,  wherein  he  said : 

The  omission  of  the  article  inviting  the  adherence  of  other  powers  placed  this  country 
in  a  position  of  marked  disadvantage  compared  with  other  powers,  while  the  United 
States  would  have  a  treaty  right  to  interfere  with  the  canal  in  time  of  war  or  appre- 
hended war,  and  while  other  powers  could  with  a  clear  conscience  disregard  any  of  the 
restrictions  imposed  by  the  convention  of  1900,  Great  Britain  alone  would  be  absolutely 
precluded  from  resorting  to  any  such  action  or  from  taking  measures  to  secure  her  inter- 
est in  and  near  the  canal. 

While  indifferent  as  to  the  form  in  which  the  point  is  met,  I  must  emphatically  renew 
the  objections  of  His  Majesty's  Government  to  being  bound  by  stringent  rules  of  neutral 
conduct  not  equally  binding  upon  other  powers.  I  would,  therefore,  suggest  the  inser- 
tion in  rule  1,  after  "  all  nations,"  of  the  words  "  which  shall  agree  to  observe  these 
rules."  This  addition  will  impose  upon,  other  powers  the  same  self-denying  ordinance  as 
Great  Britain  is  desired  to  accept  and  will  furnish  an  additional  security  for  the  neu- 
trality of  the  canal,  which  it  will  be  the  duty  of  the  United  States  to  maintain. 

It  will  be  noted  that  Great  Britain  did  not  feel  that  she  should  be  bound 
to  neutral  conduct  in  regard  to  the  canal  unless  other  nations  also  were  so 
bound.  This,  as  I  have  said  before,  was  the  very  essence  of  the  "  general 
principle  "  contained  in  section  8  of  the  Clayton-Bulwer  treaty. 

In  regard  to  the  suggestion  made  by  Lord  Lansdowne  that  the  canal  should 
be  free  and  open  to  all  nations  observing  the  rules  adopted  by  the  United  States 
and  Great  Britain,  Mr.  Lowther,  in  a  coniniunication  of  September  12, 1901,  said : 

With  regard  to  the  changes  suggested  by  His  Majesty's  Government,  Mr.  Hay  was  ap- 
prehensive that  the  first  amendment  proposed  to  clause  1  of  article  3  would  meet  with 
opposition  because  of  the  strong  objection  entertained  to  inviting  other  powers  to  become 
contract  parties  to  a  treaty  affecting  the  canal.  If  His  Majesty's  Government  found  it 
not  convenient  to  accept  the  draft  as  it  stood,  they  might  perhaps  consider  favorably  the 
substitution  for  the  words  "  the  canal  shall  be  free  and  open  to  the  vessels  of  commerce 
and  of  war  of  all  nations  which  shall  agree  to  observe  these  rules  "  the  words  "  the  canal 
shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations  observing 
these  rules,"  and  instead  of  "  any  nation  so  agreeing  "  the  words  "  any  such  nation." 
This,  it  seenaed  to  Mr.  Hay,  would  accomplish  the  purpose  aimed  at  by  His  Majesty's 
Government. 

To  this  Lord  Lansdowne  replied,  under  date  of  October  23,  1901 : 

Mr.  Hay  has  suggested  that  in  article  3,  rule  1,  we  should  substitute  for  the  words 
"  the  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
which  shall  agree  to  observe  these  rules,"  etc.,  the  words  "  the  canal  shall  be  free  and 
open  to  the  vessels  of  commerce  and  of  war  of  all  nations  observing  these  rules,"  and  in 
the  same  clause  as  a  consequential  amendment,  to  substitute  for  the  words  "  any  nation 
so  agreeing"  the  words  "any  such  nation."-  His  Majesty's  Government  were  prepared 
to  accept  this  amendment,  which  seemed  to  us  equally  efficacious  for  the  purpose  which 
we  had  in  view,  namely,  that  of  insuring  that  Great  Britain  should  not  be  placed  in  a 
less  advantageous  position  than  other  powers,  which  they  stopped  short  of  conferring 
upon  other  nations  a  contractual  right  to  the  use  of  the  canal. 
95272—12090 


47 

Article  2  of  the  original  treaty  transmitted  to  the  Senate  by  President  McKin- 
ley  contained  this  paragraph : 

The  high  contracting  parties,  desiring  to  preserve  and  maintain  the  "  general  prin- 
ciple "  of  neutralization  established  in  article  8  of  the  Clayton-Bulwer  convention,  which 
convention  is  hereby  superseded,  adopt  as  the  basis  for  such  neutralization  the  following 
rules,  substantially  as  embodied  in  the  convention  between  Great  Britain  and  certain 
other  powers,  signed  at  Constantinople  October  29,  1888,  for  the  free  navigation  of  the 
Suez  Maritime  Canal,  that  is  to  say : 

In  line  with  the  suggestions  above  referred  to,  in  the  final  draft  of  the 
treaty  as  sent  to  the  Senate  by  President  Roosevelt,  and  which  was  finally 
ratified,  this  paragraph  reads  as  follows : 

The  United  States — 

Not  the  United  States  and  Great  Britain,  but  the  United  States- 
adopts  as  the  basis  of  the  neutralization  of  such  ship  canal  the  following  rules,  substan- 
tially as  embodied  in  the  convention  of  Constantinople,  signed  the  28th  of  October,  1888, 
for  the  free  navigation  of  the  Suez  Canal ;  that  is  to  say. 

In  the  memorandum  submitted  by  Lord  Lansdowne  of  August  3,  1901,  refer- 
ring to  this  change,  he  says : 

In  form  the  new  draft  differs  from  the  convention  of  1900,  under  which  the  high  con- 
tracting parties,  after  agreeing  that  the  canal  might  be  constructed  by  the  United  States, 
undertook  to  adopt  certain  ruies>  as  the  basis  upon  which  the  canal  was  to  be  neutralized. 
In  the  new  draft  the  United  States  intimate  their  readiness  "  to  adopt  "  somewhat  simi- 
lar rules  as  the  basis  of  the  neutralization  of  the  canal.  It  would  appear  to  follow  that 
the  whole  responsibility  for  upholding  these  rules,  and  thereby  maintaining  the  neutrality 
of  the  canal,  would  henceforward  be  assumed  by  the  Government  of  the  United  States*. 
The  change  of  form  is  aa  important  one  ;  but  in  view  of  the  fact  that  the  whole  cost  of 
the  construction  of  the  canal  is  to  be  borne  by  that  Government,  which  is  also  to  be 
charged  with  such  measures  as  may  be  necessary  to  protect  it  against  lawlessness  ana 
disorder,  His  Majesty's  Government  are  not  likely  to  object  to  it. 

From  these  negotiations  and  from  the  nature  of  this  treaty  as  compared  with 
the  Claytou-Bulwer  treaty  it  is  clear  that  Great  Britain  recognized  that  the 
"general  principle"  of  section  8  of  the  Bulwer  treaty  under  the  new  treaty 
simply  imposes  upon  the  United  States  the  obligation  to  treat  all  the  other 
nations  of  the  world  equally  and  without  discrimination  in  the  use  of  the  canal. 
The  United  States  was  not  only  to  build  the  canal  or  to  see  that  it  was  built, 
but  the  United  States  alone  was  obligated  to  protect  it  and  to  maintain  its  neu- 
trality. England  was  relieved  of  all  obligations  and  responsibilities,  as  well  as 
other  nations. 

That  construction  is  also  borne  out  by  the  treaty  negotiated  between  this 
Government  and  the  Government  of  Columbia  after  the  Hay-Pa uncefote  treaty 
was  entered  into.  In  article  17  of  that  treaty  it  is  provided  that  the  vessels, 
troops,  and  munitions  of  war  of  Colombia  shall  go  through  the  canal  without 
charge.  It  reads: 

The  Government  of  Colombia  shall  have  the  right  to  transport  over  the  canal  its 
vessels,  troops,  and  munitions  of  war  at  all  times  without  paying  charges  of  any  kind. 
This  exemption  is  to  be  extended  to  the  auxiliary  railway  for  the  transportation  of  per- 
sons in  the  service  of  the  Republic  of  Colombia  or  of  the  Department  of  Panama,  ov  of 
the  police  force  charged  with  the  preservation  of  public  order"  outside  of  said  zone,  as 
well  as  to  their  baggage,  munitions  of  war,  and  supplies. 

Why  was  that  provision  put  in  the  treaty  with  Colombia?  I  believe  it  was 
placed  there  because  under  article  23  it  was  the  duty  of  Colombia,  in  case  there 
was  trouble  on  the  canal,  "  to  provide  the  forces  necessary  for  such  purpose/* 
Article  23  reads : 

If  it  should  become  necessary  at  any  time  to  employ  armed  forces  for  the  safety  or 
protection  of  the  canal,  or  of  the  ships  that  make  use  of  the  same,  or  the  railways  and 
other  works,  the  Republic  of  Colombia  agrees  to  provide  the  forces  necessary  for  such 
purpose,  according  to  the  circumstances  of  the  case  ;  but  if  the  Government  of  Colombia 
can  not  effectively  comply  with  .this  obligation,  then,  with  the  consent  of  or  at  the  request 
of  Colombia,  or  of  her  minister  at  Washington,  or  of  the  local  authorities,  civil  or  mili- 
tary, the  United  States  shall  employ  such  force  as  may  be  necessary  for  that  sole  purpose  ; 
and  as  soon  as  the  necessity  shall  have  ceased  will  withdraw  the  forces  so  employed. 
Under  exceptional  circumstances,  however,  on  account  of  unforeseen  or  imminent  danger 
to  said  canal,  railways,  and  other  works,  or  to  the  lives  and  property  of  the  persons 
employed  upon  the  canal,  railways,  and  other  works,  the  Government  of  the  United  States 
is  authorized  to  act  in  the  interest  of  their  protection,  without  the  necessity  of  obtaining 
the  consent  beforehand  of  the  Government  of  Colombia ;  and  it  shall  give  immediate 
advice  of  the  measures  adopted  for  the  purpose  stated  :  and  as  soon  as  sufficient  Colombian 
forces  shall  arrive  to  attend  to  the  indicated  purpose  those  of  the  United  States  shall 
retire. 

That  is  for  the  purpose  of  preserving  peace  and  order  and  protecting  the 
canal.  So  that  was  in  line  with  the  general  principle  of  the  Clayton-Bulwer 

95272—12090 


48 

treaty  that  the  nations  with  equal  obligations  should  be  treated  equally  with 
reference  to  the  use  of  the  cnnal. 

Mr.  REED.     Mr.  President 

The  PRESIDING  OFFICER  (Mr.  SIMMONS  in  the  chair).  Does  the  Senator 
from  Washington  vield  to  the  Senator  from  Missouri? 

Mr.  JONES.     Certainly. 

Mr.  REED.  If  the  view  so  often  expressed  here  by  Senators  is  correct,  that 
our  Government  can  not  permit  the  free  use  of  the  canal  by  our  own  vessels  or 
vessels  flying  our  flag  because  it  is  barred  from  so  doing  by  the  clause  of  the 
treaty  providing  that  all  nations  shall  have  the  equal  use  of  the  canal,  giving 
to  that  clause  the  construction  that  the  expression  "  all  nations "  includes  the 
Government  of  the  United  States,  does  not  the  Senator  think  that  that  same 
clause  would  have  barred  us  from  making  the  treaty  we  did  make  writh  the 
Government  of  Colombia,  and  have  we  not  already  violated  it? 

Mr.  JONES.  I  think  so,  Mr.  President.  By  no  possible  construction  can  it 
be  held  that  the  United  States  would  be  violating  the  "  general  principle  "  by 
giving  a  preference  to  her  own  citizens  and  vessels  in  the  use  of  the  canal  con- 
structed under  her  "  auspices."  On  the  contrary,  such  preference  is  expressly 
authorized  by  this  "  general  principle,"  as  under  it  Great  Britain  and  the 
United  States  were  not  bound  to  allow  the  use  of  such  canal  on  equal  terms  to 
any  except  those  who  would  join  with  them  in  affording  protection  to  the  canal 
or  those  who  would  assume  equal  obligations  with  the  United  States  and  Great 
Britain. 

It  is  contended,  however,  that  rule  1  of  article  3  prohibits  us  from  giving  any 
preference  to  our  own  ships.  It  must  be  borne  in  mind  that  the  rules  adopted 
as  the  basis  for  the  neutralization  of  the  canal  are  rules  adopted  by  the  United 
States  to  insure  the  neutralization  of  the  canal.  It  seems  to  me  that  in  the 
discussion  of  this  provision  in  the  treaty  that  point  is  overlooked.  We  simply 
quote  the  language  of  the  rule  itself  without  quoting  the  preamble  to  it,  that  it 
is  a  rule  adopted  by  the  United  States.  They  are  not  rules  adopted  for  the 
United  States  or  to  govern  the  United  States,  but  they  are  rules  adopted  by 
the  United  States  to  be  observed  by  other  nations  in  the  use  of  the  canal  con- 
sistent with  its  neutrality. 

The  United  States  says,  not  to  herself  but  to  the  nations  of  the  world,  "  You 
may  use  this  canal  if  you  observe  these  rules." 

Rule  1  is  as  follows : 

The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  these  rules  on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimination 
against  any  such  nation  or  its  citizens  or  subjects  in  respect  of  the  conditions  or  charges 
of  traffic  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be  just  and  equitable. 

The  canal  shall  never  be  blockaded,  nor  shall  any  right  of  war  be  exercised,  nor  any 
act  of  hostility  be  committed  within  it.  The  United  States,  however,  shall  be  at  liberty 
to  maintain  such  jnilitary  police  along  the  canal  as  may  be  necessary  to  protect  it  against 
lawlessness  and  disorder. 

It  is  plain  to  me  that  this  rule  refers  to  nations  other  than  the  United  States. 
The  United  States  stands  on  one  side  as  the  maker  of  these  rules.  The  other 
nations  of  the  earth  are  those  who  stand  on  the  other  side  and  who  are  to 
observe  the  rules  and  for  whose  observance  the  rules  are  made.  This  is  the 
natural  and  ordinary  construction  to  give  to  this  language  in  connection  with 
the  preceding  declaration  that  the  "  United  States  adopts  "  these  rules. 

The  owner  of  a  ferry  promulgates  rules  for  the  use  of  his  ferry  to  be  observed 
by  his  passengers,  not  by  himself,  and  when  he  says  that  "  all  persons  observing 
these  rules  may  pass  his  horses  and  cows  over  this  ferry  "  no  one  would  under- 
stand that  the  term  "  all  persons  observing  these  rules "  includes  himself  and 
that  he  would  charge  himself  for  crossing  his  horses  and  cows  on  the  ferry. 
If  the  owner  of  certain  lands  puts  up  a  sign  "All  hunting  on  these  premises  is 
prohibited,"  no  one  would  contend  that  he  could  not  hunt  thereon.  So  it  is 
with  the  language  of  this  rule. 

It  is  a  rule  made  by  the  United  States  for  and  under  which  all  other  nations 
or  "  all  nations,"  if  you  please,  "  observing  "  the  rules  shall  be  admitted  to  the 
use  of  the  canal,  so  that  when  the  United  States  says  that  the  canal  shall  be 
free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations  observing 
these  rules,  it  is  the  same  as  the  ferryman  saying  that  "  all  persons  paying 
him  25  cents"  will  be  transported  across  the  stream  on  which  his  ferry  oper- 
ates, and  there  is  nothing  in  the  world  that  makes  it  a  discrimination  against 
any  of  these  nations  to  permit  our  vessels  to  go  through  the  canal  free,  while 

95272 — 12090 


49 

they  pay,  any  more  than  it  would  be  for  the  ferryman  to  carry  himself  across 
without  charge. 

This  rule  simply  says  that  all  those  nations  observing  the  rules  laid  down  by 
the  United  States  will  be  treated  without  any  discrimination  the  one  against 
the  other.  This  is  in  harmony  with  the  "  general  principle  "  contained  in  sec- 
tion 8  of  the  Clayton-Bulwer  treaty.  The  United  States  is  the  only  nation  upon 
which  any  obligations  are  imposed  in  connection  with  the  construction,  opera- 
tion, protection,  and  maintenance  of  the  canal.  All  other  nations  are  free  from 
any  obligations  of  any  kind,  and  according  to  that  "principle"  the  nations 
without  obligations  are  to  be  treated  alike,  while  the  nation  with  obligations 
may  receive  different  treatment. 

It  seems  to  me  that  there  is  no  room  for  argument  and  no  room  for  construc- 
tion. The  language  is  plain  and  the  meaning  is  clear,  and  there  is  not  .in 
American  citizen  wTith  average  intelligence  who  will  take  any  different  view  as 
to  the  obligations  and  as  to  the  rights  of  the  United  States  in  this  respect. 
While  the  meaning  of  this  article  and  of  this  rule  must  be  arrived  at  from  the 
language  used,  the  construction  that  I  have  given  to  it  is  confirmed  by  what 
would  result  from  any  different  construction.  If  we  are  to  hold  that  the  United 
States  can  show  no  preference  to  its  own  vessels,  then  we  must  say  to  the 
people  of  this  country  that  their  money  has  built  the  canal ;  they  must  maintain 
it  and  operate  it  at  their  own  expense ;  they  must  protect  it  from  disorder,  from 
lawlessness,  and  from  damage ;  they  must  maintain  its  neutrality  at  the  possible 
expense  of  much  blood  and  treasure;  and,  notwithstanding  all  this,  the  vessels 
of  war  of  the  United  States  can  not  go  through  the  canal  except  upon  the  same 
conditions,  with  the  same  restraints,  and  the  same  charges  which  the  vessels 
of  war  of  any  other  nation  must  bear  and  pay,  and  that  the  vessels  of  citizens 
of  the  United  States  can  not  go  through  the  canal  without  paying  the  same 
charges  that  are  paid  by  the  vessels  of  the  citizens  of  other  countries  who  have 
no  obligations  and  who  have  been  to  no  expense  in  connection  with  the  canaL 
If  any  other  construction  is  advocated,  we  must  admit  to  our  people  that  the 
President  of  the  United  States,  who  made  this  treaty,  and  the  Senators  who 
ratified  it,  had  no  regard  for  the  rights  and  interests  of  the  people  of  the  United 
States  in  framing  this  treaty.  This  I  will  not  admit. 

A  further  examination  of  these  rules  makes  it  certain  that  they  were  adopted 
by  the  United  States  for  the  observance  of  other  nations.  It  is  said  that  the 
canal  "  shall  never  be  blockaded."  The  United  States  w^ould  never  blockade  its 
own  canal  or  the  canal  or  ports  within  its  control.  This  can  mean  nothing: 
except  that  the  canal  shall  never  be  blockaded  by  nations  other  than  the  United 
States ;  in  other  words,  by  "  those  observing  these  rules." 

Again,  it  provides  that  "  vessels  of  war  of  a  belligerent  shall  not  revictual, 
except  so  far  as  may  be  strictly  necessary,  in  the  canal."  Does  anyone  suppose 
for  a  moment  that  a  war  vessel  of  the  United  States  going  through  the  canal 
could  not  revictual  to  any  extent  desired,  even  though  the  United  States  might 
be  at  war  with  some  other  nation?  Is  it  possible  that  there  is  territory  under 
the  Stars  and  Stripes  in  which  our  war  vessels  can  not  stop  to  revictual?  I 
can  not  think  so.  Our  people  will  never  admit  it. 

It  is  further  provided  that  "  the  transit  of  such  vessel  through  the  canal  shall 
be  effected  with  the  least  possible  delay  in  accordance  with  the  regulations  in. 
force  and  with  only  such  intermission  as  may  result  from  the  necessities  of 
the  service." 

This  clearly  refers  to  nations  at  war  with  nations  other  than  the  United 
States.  The  regulations  in  force  would  be  regulations  made  by  the  United 
States  for  the  purpose  of  governing  the  passage  of  ships  of  belligerent  nations 
through  the  canal.  It  is  ridiculous  to  suppose  that  a  war  vessel  of  the  United 
States  would  have  to  pass  through  the  canal  any  more  rapidly  or  expeditiously 
than  the  United  States  itself  would  desire. 

Again,  it  is  provided  "  no  belligerent  shall  embark  or  disembark  troops  in 
the  canal."  It  also  is  provided  in  rule  5  that — 

Vessels  of  war  of  a  belligerent  shall  not  remain  in  such  waters — 

Referring  to  waters  adjacent  to  the  canal,  within  3  marine  miles  of  either 
end,  and  which  are  owned  by  the  United  States — 

longer  than  24  hours  at  any  one  time,  except  in  case  of  distress,  and  in  such  case  shall 
depart  as  soon  as  possible. 
95272  °— 12000 4 


50 

Were  these  rules  made  to  apply  to  vessels  of  the  United  States?  Must  our 
war  vessels  leave  our  own  territory  within  24  hours?  If  so,  where  will  they  go? 
It  is  too  plain  to  admit  of  argument  that  these  rules  were  not  made  by  the 
United  States  to  govern  themselves,  but  were  made  to  be  observed  by  the  na- 
tions that  were  to  use  the  canal  on  terms  of  equality.  It  is  unthinkable  that 
we  would  agree  to  a  treaty  that  required  our  warships  to  leave  our  own  terri- 
tory within  24  hours,  and  yet  that  is  what  we  have  done  if  any  other  construc- 
tion is  given  to  this  treaty. 

Mr.  BRISTOW.  Mr.  President,  referring  to  the  matter  of  the  landing  of  troops, 
the  Senator  is  aware,  of  course,  that,  as  a  matter  of  fact,  we  are  now  construct- 
ing barracks  and  expect  to  maintain  on  the  Isthmus  and  along  the  canal  some 
two  or  three  thousand  American  soldiers  all  the  time. 

Mr.  JONES.  Certainly;  and  we  expect  and  have  voted  to  fortify  the  canal, 
and  England  has  not  made  any  objection. 

Mr.  MASSEY.     Mr.  President 

The  PRESIDING  OFFICER.  Does  the  Senator  from  Washington  yield  to 
the  Senator  from  Nevada? 

Mr.  JONES.     Certainly. 

Mr.  MASSEY.  I  merely  want  to  interject  the  remark  that  we  are  fortifying  it 
for  offensive  and  defensive  purposes,  so  far  as  this  Government  is  concerned. 

Mr.  JONES.  Certainly;  we  are  dealing  with  it  just  as  if  it  were  our  own,  as 
indeed  it  is. 

Mr.  POMERENE.     Mr.  President 

The  PRESIDING  OFFICER.  Does  the  Senator  from  Washington  yield  to  the 
Senator  from  Ohio? 

Mr.  JONES.     Certainly. 

Mr.  POMERENE.  Mr.  President,  the  Hay-Pauncefote  treaty  was  made  before 
we  acquired  title  to  the  Panama  strip.  The  Senator's  position,  as  I  under 
stand,  is  that  we  have  the  right  to  fortify  the  canal  and  to  blockade  it,  as  we 
see  fit. 

Mr.  JONES.  We  have  the  right  to  do  with  it  as  we  please.  The  provision 
against  blockading  does  not  apply  to  the  United  States,  because  no  Government 
would  blockade  its  own  ports. 

Mr.  POMERENE.  Very  well.  In  other  words,  we  have  the  right  to  contro 
it.  When  the  Hay-Pauncefote  treaty  was  before  the  Senate  for  consideration 
the  Senator  from  Texas  [Mr.  CULBEKSON]  offered  the  following  amendment: 

It  is  agreed,  however,  that  none  of  the  immediately  foregoing  conditions  and  stipula 
tions  in  sections  Nos.  1,  2,  3,  4,  and  5  of  this  article  shall  apply  to  measures  which  the 
United  States  may  find  it  necessary  to  take  for  securing  by  its  own  forces  the  defense  of 
the  United  States  and  the  maintenance  of  public  order. 

I  take  it  there  is  nothing  in  this  proposed  amendment  which  would  be  incon 
sistent  with  the  position  now  taken  by  the  Senator  from  Washington.  It  cer 
tainly  would  have  added  to  the  clearness  of  the  contention  which  the  Senator 
is  now  making.  Can  the  Senator  explain  why,  in  view  of  at  least  a  certain 
amount  of  obscurity  which  there  is  in  the  treaty,  this  proposed  amendment  was 
defeated? 

Mr.  JONES.  Mr.  President,  I  do  not  concede  that  there  is  any  obscurity  in  it 
It  is  just  as  plain  to  iny  mind  as  it  is  now  worded  as  it  would  be  with  that 
language  in  it.  I  have  no  doubt  that  those  amendments  were  voted  down  bj 
the  Senate  on  the  theory  that  the  treaty  was  plain  and  that  we  had  that  right 
already,  just  the  same  as  in  the  matter  of  fortifications. 

Mr.  O' GORMAN.     Mr.  President 

The  PRESIDING  OFFICER.  Does  the  Senator  from  Washington  yield  to 
the  Senator  from  New  York? 

Mr.  JONES.     Certainly. 

Mr.  O'GORMAN.  Confirming  the  view  of  the  Senator  from  Washington,  the 
statement  has  been  made  repeatedly  during  the  discussion  of  this  bill  that  the 
amendment  referred  to  by  the  Senator  from  Ohio  [Mr.  POMEEENE]  was  voted 
down  at  the  time  under  the  belief  that  there  was  no  need  of  amplifying  the 
language  of  the  treaty;  that  the  treaty  as  it  stood  was  susceptible  only  of  the 
interpretation  that  is  now  being  argued  for  by  the  Senator  from  Washington. 
******* 

Mr.  JONES.  Mr.  President,  it  seems  to  me  it  would  be  a  great  reflection 
upon  the  intelligence  and  patriotism  of  Senators  who  voted  against  those  amend- 
ments to  accept  any  different  construction. 

Mr.  TOWNSEND.     Mr.  President 

95272—12090 


51 

The  PRESIDING  OFFICER.  Does  the  Senator  from  Washington  yield  to  the 
Senator  from  Michigan? 

Mr.  JONES.     Certainly. 

Mr.  TOWNSEND.  Another  thought  has  occurred  to  me,  Mr.  President,  in 
reference  to  that  proposition.  If  the  amendment  offered  by  the  Senator  from 
Texas  at  that  time  had  prevailed  it  would  certainly  have  excluded  the  other 
proposition,  namely,  the  right  of  the  Government  to  admit  its  own  vessels  en- 
jr.ised  in  the  foreign  trade  through  the  canal  without  toll.  It  would  then,  in 
that  case,  be  recognized  as  having  limited  the  power  of  the  United  States  simply 
to  vessels  engaged  in  its  coastwise  traffic  and  have  excluded  those  engaged  in  the 
foreign  trade. 

Mr.  JONES.  But  why  multiply  words?  The  treaty  is  plain.  Its  purpose  is 
clear.  There  is  no  ambiguity  about  it.  The  canal  is  to  be  built  under  "  the 
auspices"  of  the  United  States.  It  is  to  assume  all  the  obligations  in  connec- 
tion with  the  canal — to  pay  the  money,  to  bear  the  cost,  to  protect  it,  to  insure 
its  neutrality — and  the  nations  of  the  world,  who  have  been  to  no  expense  and 
who  are  under  no  obligations  with  reference  to  the  canal,  will  be  treated  im- 
partially and  without  discrimination  if  they  observe  the  rules  prescribed  for 
them  by  the  United  States.  That  is  all  there  is  to  it.  That  is  our  agreement. 

If  this  canal  had  been  constructed  under  the  "  auspices  "  of  the  United  States, 
as  contemplated  when  this  treaty  was  entered  into,  it  is  clear  to  me  that  it 
would  be  at  perfect  liberty  to  give  a  preference  to  its  own  vessels  and  citizens 
using  the  canal,  and  we  might  well  stop  here  upon  this  proposition.  There  is 
another  phase  of  it,  however,  which  appeals  to  me. 

When  this  treaty  was  entered  into  there  was  no  thought  upon  the  part  of 
anybody  that  the  United  States  would  acquire  the  title  to  and  sovereignty  over 
lands  on  the  Isthmus  through  which  the  canal  could  be  built.  This  treaty 
was  made  on  the  basis  that  the  United  States  would  secure  concessions  of 
some  kind  through  the  territory  of  the  Central  American  States  in  accordance 
with  which  it  would  put  in  the  canal  or  see  that  it  was  constructed.  Negotia- 
tions had  been  had  from  time  to  time  with  Nicaragua,  and  negotiations  were 
even  pending  with  Colombia  at  the  time  the  treaty  was  made  for  such  conces- 
sions, and,  under  date  of  January  23,  1903,  President  Roosevelt  transmitted 
to  the  Senate  a  treaty  made  with  the  Republic  of  Colombia  under  which  the 
United  States  was  given  "  the  exclusive  right  for  a  term  of  100  years,  renewable 
at  the  sole  and  absolute  option  of  the  United  States  for  periods  of  similar  dura- 
tion, so  long  as  the  United  States  may  desire,  to  excavate,  construct,  maintain, 
operate,  control,  and  protect  the  maritime  canal,  with  or  without  locks,  from 
the  Atlantic  to  the  Pacific  Ocean  to  and  across  the  territory  of  Colombia," 
and  for  this  purpose  the  Republic  of  Colombia  granted  to  the  United  States 
for  the  term  of  100  years,  renewable  as  above  provided,  the  use  and  control  of 
the  territory  along  the  route  of  the  canal  5  kilometers  in  width  on  either  side 
of  the  same.  This  grant,  however,  amounted  to  nothing  more  than  a  perpetual 
lease,  and  was  granted  upon  the  conditions  set  out  in  the  treaty.  The  United 
States  bound  itself  to  pay  Colombia  $10,000,000  on  ratification  of  the  treaty 
and  an  annual  payment  of  $250.000  during  the  life  of  the  treaty,  beginning  nine 
years  after  its  date. 

It  was  expressly  provided  in  article  4: 

The  rights  and  privileges  granted  to  the  United  States  by  the  terms  of  this  convention 
shall  not  affect  the  sovereignty  of  the  Republic  of  Colombia  over  the  territory  within 
whose  boundaries  such  rights  arid  privileges  are  to  be  exercised. 

The  United  States  freely  acknowledges  and  recognizes  this  sovereignty  and  disavows 
any  intention  to  impair  it  in  any  way  whatever  or  to  increase  its  territory  at  the  expense 
of  Colombia,  or  of  any  of  the  sister  Republics  in  Central  or  South  America,  but,  on  the 
contrary,  it  desires  to  strengthen  the  power  of  the  Republics  on  this  continent  and  to 
promote,  develop,  and  maintain  their  prosperity  and  independence. 

When  this  treaty  was  negotiated  no  thought  was  entertained  of  acquiring  the 
title  and  sovereignty  to  the  lands  through  which  the  canal  was  to  be  constructed. 

The  canal,  however,  was  built  under  conditions  never  contemplated  by  anyone 
at  the  time  of  the  making  of  the  Hay-Pa uncefote  treaty.  The  essential  condi- 
tions underlying  the  treaty  are  entirely  lacking.  The  canal  was  to  have  been 
built  under  concessions  secured  from  other  countries  when  using  foreign  terri- 
tory. It  has  been  built,  however,  through  territory  owned  by  the  United  States 
and  over  which  the  United  States  has  full  sovereignty.  The  canal  is  the  actual 
property  of  the  United  States,  built  in  and  through  the  territory  of  the  United 
States.  We  own  a  strip  of  territory  across  the  Isthmus  of  Panama  10  miles 
95272—12090 


52 

wide,  acquired  from  the  Republic  of  Panama  by  a  treaty  concluded  November 
18,  1903,  ratified  by  the  Senate,  and  finally  proclaimed  February  26,  1904. 

*****  *  * 

The  United  States  is,  by  the  express  terms  of  the  grant,  made  the  sovereign 
and  proprietor  of  the  land  through  which  and  in  which  the  canal  is  built. 
These  10  miles  across  the  Isthmus  of  Panama  are  the  territory  or  property  of 
the  United  States.  As  such,  its  control  and  its  use  is  a  matter  of  domestic 
concern  with  which  and  about  which  110  foreign  nation  can  interfere. 

The  Hay-Pauncefote  treaty  did  not  contemplate,  and  could  not  contemplate, 
this  state  of  affairs,  and  even  if  under  the  terms  of  the  treaty  the  United  States 
would  have  been  prohibited  from  giving  a  preference  to  its  own  vessels  if  the 
canal  had  been  constructed  under  the  conditions  contemplated  by  the  treaty  it 
can  not  apply  to  the  present  situation  and  to  its  rights  in  its  own  territory. 

As  I  have  said  before,  it  would  be  beyond  the  power  of  the  President  and  the 
Senate  by  treaty  to  prescribe  rules  and  regulations  with  reference  to  the  use 
or  in  respect  to  the  property  or  territory  of  the  United  States.  That  can  be 
done  only  by  Congress.  What  they  could  not  do  they  will  not  be  presumed  to 
have  attempted  to  do,  and  this,  in  niy  judgment,  is  a  conclusive  argument 
against  the  contention  that  under  the  treaty  the  United  States  is  prohibited 
from  giving  a  preference  to  its  own  vessels  passing  through  the  canal. 

*  ****** 

This  treaty  does  not  apply  to  the  canal  as  constructed.  If  we  had  acquired 
the  10-mile  strip  we  now  own,  the  treaty  would  never  have  been  entered  into. 
We  would  have  gone  on  and  built  the  canal  without  consulting  any  other 
nation  on  earth.  If  we  want  to  build  another  canal  or  promote  its  building 
through  foreign  territory  this  treaty  would  apply,  but  so  far  as  the  canal  as 
now  built  is  concerned  it  is  just  as  if  the  treaty  had  never  been  made. 

But,  in  any  event,  under  the  plain  terms  of  the  treaty  we  are  not  prohibited 
from  giving  a  preference  to  our  own  ships,  and  by  reason  of  the  changed  con- 
ditions not  contemplated  in  the  making  of  the  treaty  by  which  the  canal  is  our 
own  absolute  property,  constructed  in  and  through  our  own  territory,  the 
treatment  of  our  vessels  is  a  purely  domestic  matter,  with  which  no  other 
nation  has  any  concern  and  with  which  we  will  tolerate  no  interference  what- 
ever upon  the  part  of  any  other  government.  We  may  quibble  and  split  legal 
hairs  all  wre  please  here,  but  the  people  of  the  country  know  that  this  canal  is 
ours,  that  it  passes  through  our  territory ;  and  they  know  that,  being  ours  and 
passing  through  our  territory,  we  can  use  it  as  we  please  and  permit  its  use  to 
our  citizens  upon  such  terms  as  we  see  fit  to  impose,  and  they  will  brook  no 
interference  with  our  rights  in  this  respect  by  any  nation  on  earth. 

******* 

Mr.  President,  this  is  the  most  momentous  legislation  of  this  Congress  and 
of  many  years.  We  must  assert  our  right  to  develop  with  our  own,  for  our 
own  as  we  deem  wise  and  proper  without  interference  by  any  foreign  power. 
We  must  deny  the  right  of  the  treaty-making  power  to  surrender  to  any  other 
nation  the  right  to  control  the  use' we  shall  make  of  our  own  property  or  the 
treatment  we  shall  accord  to  our  own  people.  The  flag  which  flies  over  the 
Panama  Canal  must  mean  there  the  same  as  it  does  in  any  other  Territory  of 
the  Republic.  No  toll  gatherer  should  stand  at  its  portals  and  exact  tribute 
from  American  ships  and  American  commerce  any  more  than  at  the  entrance 
of  any  other  Government  work.  This  greatest  of  all  national  undertakings 
must  be  kept  free  from  railroad  control  and  preserved  as  the  most  efficient 
defender  of  American  enterprise  and  American  business  from  monopolistic  exac- 
tions. Built  by  American  capital,  completed  by  American  energy  and  pluck, 
operated  and  controlled  by  the  American  Republic,  with  justice  to  our  own 
people  and  impartiality  toward  all  nations,  this  greatest  achievement  of  the 
ages  will  glorify  us  and  bless  all  mankind. 


FROM  SPEECH  OF  HON.   FRANK  E.   DOREMUS,   OF  MICHIGAN,    IN 
THE  HOUSE  OF  REPRESENTATIVES  MAY   16,    1912. 

Mr.  DOREMUS.     Mr.  Chairman,  I  desire  at  the  outset  to  make  a  few  general 
observations  that  will  explain  my  attitude  on  the  pending  bill  before  entering 
upon  a  discussion  of  its  merits. 
05272—12090 


53 

The  five  members  of  the  committee  who  signed  the  minority  report  parted 
company  with  their  colleagues  because  of  a  firm  conviction  that  to  tax  interstate 
commerce  at  the  Panama  Canal  would  be  an  unwarranted  departure  from  a 
long-established  policy  and  would  deny  to  the  American  people  the  full  and 
complete  benefits  to  which  an  investment  of  .$400,000,000  clearly  entitles  them. 
[Applause.] 

To  my  mind  this  is  the  most  important  and  far-reaching  question  that  has 
come  before  Congress  in  a  generation.  The  naked  issue  that  confronts  this 
House  is  whether  the  Panama  Canal  is  to  be  run  in  the  interest  of  the  tax- 
payers and  consumers  of  the  United  States  or  in  the  interest  of  the  transconti- 
nental railroads  that  have  always  opposed  the  canal  and  would  now  destroy 
its  beneficial  use  to  the  American  people.  [Applause.] 

In  my  judgment,  Mr.  Chairman,  it  would  mean  political  suicide  for  any 
party  or  any  individual  who  votes  to  make  this  great  canal,  built  at  such 
tremendous  expense,  less  than  a  free  and  unfettered  competitor  of  railroad 
transportation.  [Applause.] 

If  we  could  have  a  referendum  on  this  question  of  a  free  waterway  to 
interstate  commerce,  absolutely  divorced  from  railroad  influences,  nine-tenths 
of  the  American  people  would  vote  "  Yes  "  and  the  railroads  would  vote  "  No." 

The  canal  should  not  tmly  be  a  free  waterway  for  our  domestic  commerce, 
but  no  railroad-owned  or  railroad-controlled  boat  engaged  in  interstate  com- 
merce should  be  permitted  to  poke  its  nose  into  the  locks.  [Applause.] 

I  repudiate  the  specious  plea  that  this  great  question  should  await  a  future 
solution.  The  time  to  play  fair  with  the  American  people  is  now.  Let  us  not 
do  the  wrong  thing  to-day  and  trust  to  a  future  Congress  to  right  the  wrong. 
[Applause.] 

It  is  said  that  by  the  Hay-Pauncefote  treaty  we  have  bartered  away  to  a 
foreign  government  our  constitutional  power  over  interstate  commerce  through 
the  canal.  On  that  proposition  I  refuse  to  run  up  the  white  flag  of  surrender. 
I  deny  that  the  control  of  our  domestic  affairs  has  been  transferred  from 
Washington  to  the  Court  of  St.  James.  [Applause.] 

If  we  are  going  to  allow  the  English  press  to  construe  the  Hay-Pauucefote 
treaty  for  us  and  permit  the  railroads  to  dominate  the  canal,  we  might  better 
have  sunk  our  four  hundred  millions  of  dollars  in  the  bottom  of  the  sea. 
******* 

I  hope  this  House  will  meet  the  issue  squarely  and  serve  notice  upon  the 
railroads  and  their  Wall  Street  allies  that  they  must  keep  their  hands  off  the 
Panama  Canal.  [Applause.] 

For  the  first  time  in  American  history  it  is  proposed  to  erect  a  tollgate  in 
the  path  of  interstate  trade.  I  believe  that  if  this  House  does  its  duty  it  will 
apply  the  torch  to  section  5  of  this  bill  and  burn  it  up.  Let  the  conflagration 
be  so  complete  that  a  like  proposal  will  never  find  its  way  to  the  floor  of  this 
House.  [Applause.] 

The  reasons  which  actuated  the  majority  of  the  Committee  on  Interstate 
and  Foreign  Commerce  to  recommend  tolls  upon  our  coastwise  trade  at  the 
Panama  Canal  are  found  in  the  report  that  accompanied  this  bill.  Therein 
we  are  informed  that  free  tolls  to  our  domestic  merchant  marine  would  be  a 
"  subsidy  "  to  the  shipowner,  because  it  would  take  money  from  the  American 
people  and  give  it  to  a  small  special  interest.  This  would  be  a  strange  doc- 
trine, Mr.  Chairman,  to  be  embraced  by  this  House,  a  majority  of  whose  Mem- 
bers profess  the  faith  of  their  Democratic  fathers  and  proclaim  their  unfalter- 
ing devotion  to  our  ancient  institutions. 

I  hold  in  my  hand  a  volume  containing  the  laws  enacted  at  the  first  session 
of  the  First  Congress  under  the  Constitution.  This  volume  is  gray  and  musty 
with  age,  but  within  its  ancient  covers  are  reflected,  in  my  opinion,  more  wis- 
dom on  the  subject  of  our  merchant  marine  and  the  development  of  American 
commerce  than  is  contained  in  all  the  propositions  that  have  been  advanced  in 
Congress  during  the  intervening  years.  The  first  act  found  in  this  volume  is 
an  act  to  regulate  the  time  and  manner  of  administering  certain  oaths — an 
unimportant  measure.  The  second  act,  introduced  by  James  Madison,  approved 
July  4,  1789,  is  an  act  for  levying  duties  on  goods,  wares,  and  merchandise 
imported  into  the  United  States. 

This  act  aimed  to  raise  revenue  for  the  support  of  the  Government,  protect 
our  infant  industries,  and  encourage  the  upbuilding  of  our  merchant  marine. 
This  latter  purpose  was  accomplished  by  providing  for  a  discount  of  10  per  cent 
of  the  tariff  duties  upon  imports  into  this  country  in  ships  built  and  owned  by 

95272—12090 


54 

American  citizens.  Not  satisfied  with  this.  Congress  provided  in  the  same  act 
for  special  discrimination  in  favor  of  American  vessels  in  the  trade  of  the  Far 
East.  It  provided  that  if  tea  was  imported  in  American  ships  direct  from  India 
and  China,  it  paid  a  duty  of  6  cents  a  pound  for  Bohea,  10  cents  for  Souchong, 
20  cents  for  Hyson,  and  12  cents  for  all  other  green  varieties.  If,  however, 
tea  was  imported  in  a  foreign  ship,  it  paid  a  duty  of  15  cents  for  Bohea,  21 
cents  for  Souchong,  45  cents  for  Hyson,  and  27  cents  for  other  varieties.  The 
effect  of  this  discrimination  in  favor  of  our  own  snipping  will  be  understood 
when  it  is  stated  that  on  a  cargo  of  100,000  pounds  of  assorted  teas  an  Ameri- 
can ship  sailing  from  China  or  India  would  pay  duties  of  $10,980,  while  a 
foreign  ship  would  pay  $27,800  for  a  like  cargo. 

The  effect  of  this  law  upon  American  shipping  was  instantaneous.  The  re- 
port of  the  American  Institute  of  the  city  of  New  York  stated  in  1828  that  "  so 
complete  has  been  this  security  that  your  committee  believes  that  there  has  not 
been  a  single  pound  of  tea  imported  since  the  passage  of  the  law  in  question 
which  has  not  been  imported  in  an  American  bottom."  (Marvin's  American 
Merchant  Marine,  p.  41)  : 

Between  1789  and  1828  Congress  passed  numerous  laws  intended  to  protect  and  encour- 
age American  shipbuilding.  Under  these  wise  and  salutary  measures  our  merchant  marine 
grew  rapidly.  On  December  31,  1789,  our  total  shipping-  registered  for  the  foreign  trade 
was  only  123,893  tons.  It  had  increased  to  346,254  tons  in  1790  and  to  576,733  tons  in 
1796. 

I  have  carefully  examined  the  debates  in  Congress  that  preceded  the  passage 
of  the  act  of  1789,  and  have  found  no  intimation  or  suggestion  that  a  reduction 
of  10  per  cent  in  duties  on  goods  carried  in  American  vessels  would  take  money 
from  the  pockets  of  the  people  and  give  it  to  a  special  interest.  The  Members 
of  that  Congress  knew  that  a  tax  collected  at  the  customhouse  would  be  borne 
by  the  consumer,  and  that  a  lower  duty  in  favor  of  goods  carried  in  American 
ships  would  relieve  the  consumer  and  at  the  same  time  encourage  the  upbuild- 
ing of  our  merchant  marine.  Give  us  more  "  subsidies "  that  leave  money  in 
the  pockets  of  the  people  and  at  the  same  time  develop  American  industries. 

The  third  act  passed  by  the  First  Congress,  approved  July  20,  1789,  was  an 
act  imposing  duties  on  tonnage.  It  provided  that  on  all  ships  built  within  the 
United  States  and  belonging  wholly  to  a  citizen  or  citizens  thereof  a  tonnage 
duty  of  6  cents  per  ton  should  be  levied.  It  provided  that  all  ships  thereafter 
built  in  the  United  States,  belonging  wholly  or  in  part  to  subjects  of  foreign 
powers,  should  pay  a  duty  of  30  cents  per  ton,  and  that  all  other  ships  should 
pay  duties  at  the  rate  of  50  cents  per  ton.  It  also  provided  that  no  ship  built 
within  the  United  States  and  belonging  to  a  citizen  or  citizens  thereof  should, 
while  employed  in  our  coasting  trade,  pay  tonnage  duties  more  than  once  in  any 
year.  At  the  present  time  no  tonnage  duties  are  imposed  upon  vessels  engaged 
in  our  coastwise  trade.  This  policy  of  encouraging  our  merchant  marine  cul- 
minated in  1817  in  a  law  that  prohibited  foreign  vessels  from  engaging  in  our 
coastwise  trade.  It  was,  however,  the  legislation  of  1789  that  laid  the  founda- 
tion of  our  long-continued  policy  of  preserving  our  domestic  trade  to  American 
vessels,  and  this  policy,  supported  by  our  ablest  statesmen  in  all  parties,  has 
given  the  United  States  the  greatest  domestic  merchant  marine  on  the  globe. 
Under  the  stimulus  of  this  early  legislation  the  tonnage  of  our  coastwise  ship- 
ping increased  from  68.607  tons  in  1789  to  245,295  tons  in  1800.  It  reached  the 
one-million  mark  in  1838,  and  has  continued  its  rapid  growth  up  to  the  present 
time.  In  1911  the  tonnage  of  our  coastwise  trade  reached  the  splendid  volume 
of  6,720,313  tons. 

In  the  Fifty-eighth  Congress  the  Democratic  minority,  while  opposing  a  direct 
subsidy  from  the  Treasury  to  American  ships,  favored  a  return  to  the  ancient 
system  of  discriminatory  duties  as  best  calculated  to  restore  our  merchant 
marine.  I  quote  the  following  from  the  report  of  the  minority  members  of  the 
Merchant  Marine  Commission,  presented  in  1905 : 

A  return  to  the  discriminating  duty  policy  appears  to  be  generally  favored,  as  shown 
by  the  hearings  of  the  Merchant  Marine  Commission  at  the  most  important  ports  on  the 
Atlantic,  Pacific,  and  Gulf  coasts;  and  on  the  Great  Lakes.  This  was  the  policy  of  the 
fathers  of  the  Republic,  under  which  our  shipping  interests  were  so  marvelously  developed 
in  our  early  history.  Under  this  policy  merchant  ships  flying  the  American  flag  were 
seen  in  every  important  port  of  the  civilized  world,  and,  under  its  fostering  care,  our  ships 
carried  more  than  three-fourths  of  our  exports  and  imports.  (Kept.  4136,  pt.  2,  58th 
Cong.,  3d  sess.) 

This  was  the  voice  of  Democracy,  speaking  through  its  chosen  Representa- 
tives, in  the  Fifty-eighth  Congress.     What  will  be  its  position  now,  when,  for 
95272—12090 


55 

the  first  time  in  American  history,  it  is  proposed  to  hold  up  at  a  tollgate  an 
American  vessel  engaged  in  interstate  trade  and  exact  from  it  the  same  tribute 
we  demand  from  a  foreign  vessel  flying  a  foreign  flag? 

My  Republican  friends,  how  are  you  going  to  vote  on  this  proposition?  This 
is  not  a  partisan  question.  Two  Republicans  and  three  Democrats  signed  the 
minority  report,  advocating  no  tolls  on  American  ships  engaged  in  interstate 
commerce.  Are  you  gentlemen,  who  in  the  past  have  advocated  direct  subsidies 
from  the  Treasury  in  order  to  encourage  our  merchant  marine,  going  to  vote 
against  this  preference  to  American  shipping?  I  sincerely  hope  not. 

*  *  *  *  *  *  * 

I  desire  now  to  discuss  the  claim  that  the  Hay-Pa uncefote  treaty  prevents 
the  United  States  from  favoring  American  vessels  engaged  in  interstate  com- 
merce. The  preamble  of  the  Hay-Pa  uncefote  treaty  recites  that  it  is — 

desirous  to  facilitate  the  construction  of  a  ship  canal  to  connect  the  Atlantic  and  Pacific 
Oceans  by  whatever  route  may  be  considered  expedient  and  to  that  end  to  remove  any 
objection' which  may  arise  our  of  the  convention  of  the  19th  of  April,  1850,  commonly 
called  the  Clayton-Bulwer  treaty,  to  tffe  construction  of  such  canal  under  the  auspices  of 
the  Government  of  the  United  States,  without  impairing  the  "  general  principle "  of 
neutralization  established  in  article  8  of  that  convention. 

For  a  proper  understanding  of  what  was  meant  by  the  words  "  general 
principle  "  of  neutralization  mentioned  in  the  preamble  of  the  treaty,  it  will  be 
necessary  to  refer  briefly  to  the  Clayton-Bulwer  treaty  and  the  circumstances 
that  surrounded  its  ratification.  The  discovery  of  gold  in  California  emphasized 
the  desirability  of  constructing  a  transisthmian  canal  to  connect  the  Atlantic 
and  Pacific  Oceans.  The  route  most  generally  considered  at  that  time  was  via 
San  Juan  River  and  Lake  Nicaragua.  In  1849  a  treaty  was  entered  into  by 
the  United  States  and  Nicaragua  whereby  the  Government  of  the  latter  con- 
ceded to  an  American  company  the  right  to  build  a  canal  from  San  Juan,  on 
the  Caribbean  Sea.  through  the  San  Juan  River  and  Lake  Nicaragua  to  the 
Pacific.  Two  obvStaeles,  however,  stood  in  the  way  of  this  company's  success- 
ful prosecution  of  the  undertaking.  One  was  the  British  pretensions  in  Nica- 
ragua, and  particularly  to  the  so-called  Mosquito  coast,  over  which  Great 
Britain  claimed  to  exercise  a  protectorate,  and  the  other  was  the  lack  of  the 
necessary  capital  in  this  country. 

It  would  serve  no  useful  purpose  to  dwell  upon  the  claims  and  counterclaims 
with  reference  to  British  pretensions  in  Nicaragua,  Costa  Rica,  and  the  Mosquito 
Coast.  It  will  suffice  to  say  that  they  were  deemed  by  this  Government  of  such 
importance  that  in  1849  Mr.  -Clayton,  Secretary  of  State,  entered  into  negotia- 
tions with  the  British  Government  that  resulted  in  the  ratification  of  the 
Clayton-Bulwer  treaty  in  1850.  By  this  treaty  the  two  Governments  engaged  to 
cooperate  in  guaranteeing  the  neutrality  of  a  ship  canal,  to  be  open  to  the 
world  and  common  to  all  nations.  This  convention  contemplated  that  the  canal 
should  be  built  by  a  private  corporation,  and  declared  that  neither  the  Govern- 
ments of  Great  Britain  nor  the  United  States  would  ever  obtain  or  maintain 
any  exclusive  control  over  the  canal ;  that  neither  would  erect  or  maintain  any 
fortifications  commanding  the  same  or  occupy,  fortify,  or  colonize,  or  assume  or 
exercise  any  dominion  over  Nicaragua,  Costa  Rica,  and  the  Mosquito  Coast,  or 
any  part  of  Central  America.  By  this  treaty  the  two  Governments  assumed  a 
joint  protectorate  over  the  canal  and  the  private  corporation  which,  it  was  ex- 
pected, would  undertake  the  work.  By  article  7  of  the  Clayton-Bulwer  treaty 
they  determined  that  they  would  give  their  support  and  encouragement  to  such 
persons  or  company  as  might  first  offer  to  commence  the  canal  with  the  neces- 
sary capital  and  the  consent  of  the  local  authorities.  This  undoubtedly  had 
reference  to  the  American  company  which  had  already  obtained  its  concession 
from  the  Government  of  Nicaragua.  At  this  time,  however,  two  other  routes 
had  been  suggested — one  through  the  Mexican  Province  of  Tehuantepec  and 
the  other  through  the  Isthmus  of  Panama.  For  this  reason  alone  another 
article  was  added  to  the  treaty.  This  was  article  8,  the  "  general  principle  "  of 
which,  under  the  Hay-Pauncefote  treaty,  it  is  our  duty  not  to  impair. 

For  the  purpose  of  this  controversy  it  would  avail  nothing  to  follow  this  cele- 
brated treaty  on  its  troublous  journey  from  1850  to  1902,  when  it  was  abrogated 
and  superseded  by  the  Hay-Pauncefote  treaty.  To-day  not  a  vestige  of  the  con- 
ditions that  surrounded  the  making  of  the  Clayton-Bulwer  treaty  remains.  All 
hope  of  constructing  the  canal  by,  private  individuals  or  corporations  was  long 
ago  abandoned.  Great  Britain  claims  no  protectorate,  sovereignty,  or  dominion 
95272—12090 


56 

of  any  kind  over  the  Isthmus  of  Panama.  The  canal  is  being  bnilt  on  territory 
that  belongs  to  the  United  States  in  perpetuity,  by  virtue  of  a  treaty  with  the 
Republic  of  Panama.  No  questions  exist  involving  the  integrity  of  the  Monroe 
doctrine. 

By  the  Hay-Pauncefote  treaty  Great  Britain  has  voluntarily  withdrawn  her 
protection  of  the  canal  to  which  she  obligated  herself  in  the  former  treaty. 
The  Panama  Canal  is  a  distinctly  American  enterprise,  and  the  United  States  is 
its  sole  owner,  builder,  and  protector.  What,  then,  is  the  "general  principle" 
of  neutralization  established  by  article  8  of  the  Clayton-Bulwer  treaty  mentioned 
in  the  preamble  of  the  Hay-Pauncefote  treaty? 

Strictly  speaking,  the  term  "  neutralization,"  when  applied  to  a  canal,  refers 
to  a  condition  under  which  the  canal  would  be  closed  to  the  ships  of  war  of 
belligerents.  The  term,  however,  has  come  to  be  used  in  a  broader  sense  than 
this,  so  as  to  include  an  arrangement  whereby  protection  is  sought  to  be  guaran- 
teed against  hostile  attack  or  hostile  interruption,  while  the  same  freedom  of 
use  is  sought  to  be  assured  in  war  as  in  peace.  No  doubt,  however,  the  leading 
motive  of  agreements  of  neutralization  is  to  secure  exemption  from  hostile 
attack  and  a  corresponding  prohibition  of  distinctive  hostile  use.  When  by 
article  9  of  the  treaty  of  Vienna  provision  was  made  for  the  "  neutrality  of  the 
Free  Town  of  Cracow  and  its  territory,"  it  was  declared  in  the  same  breath: 
"No  armed  force  shall  be  introduced  upon  any  pretense  whatever."  When  by 
article  11  of  the  treaty  of  Paris  the  Black  Sea  was  "neutralized,"  the  main- 
tenance of  armaments  upon  it  was  forbidden.  In  the  neutralization  of  Luxem- 
burg it  was  stipulated  that  the  city  of  Luxemburg  should  no  longer  be  treated  as 
a  federal  fortress.  By  a  treaty  between  Austria,  France,  Great  Britain,  Prussia, 
and  Russia,  signed  at  London  November  14,  1863,  the  Ionian  Isles  were  united  to 
Greece  and  were  neutralized. 

Article  3  of  the  treaty  declares  that — 

as  a  necessary  consequence  of  the  neutrality  to  be  thus  enjoyed  bv  the  United  States  of 
the  Ionian  Islands  the  fortifications  constructed  in  the  island  of  Corfu  and  in  its  imme- 
diate dependencies,  having  no  longer  any  object,  shall  be  demolished. 

The. treaties  of  March  30,  1856,  November  2,  1865,  and  March  13,  1871,  having 
effected  the  neutralization  of  the  lower  Danube  and  of  the  works  con str  acted 
in  aid  of  its  navigation,  the  treaty  of  Berlin  of  July  13,  1878,  provided  that — 

all  the  fortresses  and  fortifications  existing  on  the  course  of  the  river  from  the  Iron 
Gates  to  its  mouths  should  be  razed  and  no  new  ones  erected. 

The  Argentine  Republic  and  Chile  by  their  treaty  of  July  23,  1881,  declare : 

The  Straits  of  Magellan  are  neutralized  forever,  and  their  free  navigation  is  guar- 
anteed to  the  flags  of  all  nations.  To  insure  this  neutrality  and  freedom  it  is  agreed 
that  no  fortifications  or  military  defenses  which  might  interfere  therewith  shall  be  erected. 
(Moore's  International  Law  Digest,  vol.  3,  p.  267.) 

Referring  to  the  Clayton-Bulwer  treaty,  we  find  that  by  article  5  the  contract- 
ing parties  engaged  to  "protect  it  from  interruption,  seizure,  or  unjust  con- 
fiscation "  and  to  "  guarantee  the  neutrality  thereof  so  that  the  said  canal  may 
forever  be  open  and  free  and  the  capital  invested  therein  secure."  It  was, 
however,  expressly  understood  that  the  guaranty  of  protection  and  security 
was  given  conditionally  and  might  be  withdrawn  by  both  Governments  or  either 
Government  if  both  or  either  of  them  should  consider  that  the  persons  or  com- 
pany undertaking  or  managing  the  canal  had  established  regulations  concerning 
traffic  contrary  to  the  spirit  and  intention  of  the  convention  either  by  making 
unfair  discriminations  or  by  imposing  oppressive  exactons  or  unreasonable  tolls. 

Construing  articles  5  and  8  of  the  Clayton-Bulwer  treaty  together  we  can 
not  escape  the  conclusion  that  the  United  States  and  Great  Britain  engaged  to 
protect  and  guarantee  the  neutrality  of  the  canal  whichever  route  was  finally 
selected,  reserving  to  themselves,  however,  the  right  to  withdraw  that  protec- 
tion and  guaranty  if  the  private  corporation  operating  the  canal  should  discrimi- 
nate against  either.  They  also  engaged  that  the  canal  should  be  open  on  equal 
terms  to  the  citizens  and  subjects  of  every  other  nation  which  was  willing  to 
unite  with  the  United  States  and  Great  Britain  in  their  joint  protection  of  the 
canal. 

As  heretofore  observed,  under  the  Hay-Pauncefote  treaty  there  is  no  joint 

protectorate  over  the  canal.     Neither  Great  Britain  nor  any  other  nation  is 

obligated  to  cooperate  with  the  United  States  in  protecting  the  canal,  nor  is 

the  right  of  the  citizens  and  subjects  of  any  other  nation  to  the  equal  use  of 

95272—12090 


57 

the  canal  conditioned  upon  any  agreement  by  that  nation  to  cooperate  for  its 
protection.  By  article  3  of  the  present  treaty  the  canal  is  to  be  free  and  open 
without  discrimination  to  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  the  rules  which  the  United  States  has  adopted  as  the  basis  for  the 
neutralization  of  the  canal. 

The  original  draft  of  the  Hay-Pa uncefote  treaty,  as  transmitted  to  the  Senate 
by  President  McKinley,  contained  the  following: 

ART.  3.  The  high  contracting  parties  will,  immediately  upon  the  exchange  of  the  ratifi- 
cations of  this  convention,  bring  it  to  the  notice  of  the  other  powers  and  invite  them  to 
adhere  to  it. 

*  *  *  *  *  *  * 

In  the  final  draft  the  words  "  the  high  contracting  parties  "  were  stricken  out 
and  the  words  "  the  United  States  "  inserted. 

******* 
These  negotiations  seem  to  demonstrate  clearly  that  Great  Britain,  recogniz- 
ing the  United  States  as  the  sovereign  owner  and  sole  protector  of  the  canal 
and  fully  conceding  our  exclusive  right  to  provide  for  its  regulation  and  man- 
agement, was  contending  only  for  equal  treatment  with  other  powers  observing 
the  rules  adopted  by  the  United  States  as  the  basis  for  the  neutralization  of  the 
canal;  and  this,  Mr.  Chairman,  in  my  opinion,  based  upon  the  investigation 
I  have  made  of  the  question,  is  all  there  is  to  the  "  general  principle  "  of  neu- 
tralization established  in  article  8  of  the  Clayton-Bulwer  treaty,  and  which 
the  United  States  agreed  should  not  be  impaired.  Not  by  the  wildest  flight  of 
the  imagination  can  it  be  conceived  that  this  "general  principle"  would  be 
impaired  by  any  preference  the  United  States  might  see  fit  to  give  American 
vessels  engaged  in  interstate  commerce.  Would  anybody  seriously  contend  that 
under  this  treaty  Great  Britain  would  not  have  the  right  to  subsidize  her  own 
vessels  using  the  canal  or  repay  the  tolls  charged  them  for  such  use?  On  the 
contrary,  would  it  not  be  the  height  of  impertinence  for  this  Government  to 
attempt  to  dictate  to  Great  Britain  or  any  other  nation  the  treatment  they 
should  accord  their  own  shipping?  The  treatment  that  other  nations  may  see 
fit  to  give  their  own  vessels'  is  none  of  our  affair ;  and,  for  a  better  reason,  it  is 
no  concern  of  any  other  nation  what  preference  we  give  to  our  own  vessels 
using  a  canal  built,  owned,  and  controlled  by  ourselves  alone.  We  discharge 
our  obligation  to  the  world  when  we  exact  equal  tolls  and  accord  equal  treat- 
ment to  all  nations,  their  citizens  and  subjects,  that  observe  the  rules  the  United 
States  has  laid  down  for  the  neutralization  of  the  canal. 

That  portion  of  article  3  of  the  present  treaty  which  it  is  claimed  would  be 
Violated  by  passing  our  interstate  commerce  through  the  canal  without  the 
payment  of  tolls  reads  as  follows: 

The  United  States  adopts  as  the  basis  of  the  neutralization  of  such  ship  canal  the 
following  rules,  substantially  as  embodied  in  the  convention  of  Constantinople,  signed  the 
28th  of  October,  1888,  for  the  free  navigation  of  the  Suez  Canal ;  that  is  to  say  : 

"  1.  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all 
nations  observing  these  rules  on  terms  of  entire  equality,  so  that  there  shall  be  no  dis- 
crimination against  any  such  nation  or  its  citizens  or  subjects  in  respect  of  the  conditions 
or  charges  of  traffic  or  otherwise.  Such,  conditions  and  charges  of  traffic  shall  be  just  and 
equitable." 

The  language  of  the  subdivision  just  quoted  shows  plainly  that  the  purpose 
was  to  prevent  discrimination  against  any  nation.  Since  1817  no  foreign  vessel 
has  been  permitted  to  engage  in  our  coastwise  trade.  This  being  so,  any  exemp- 
tion Congress  sees  fit  to  make  in  favor  of  American  vessels  engaged  in  that 
trade  would  not  and,  in  the  very  nature  of  things,  could  not  be  a  discrimination 
against  any  nation,  its  citizens  or  subjects.  In  other  words,  no  treatment  that 
we  may  accord  our  own  vessels  could  affect  in  any  way,  either  for  better  or  for 
worse,  any  foreign  nation. 

The  United  States  having  adopted  as  the  basis  of  the  neutralization 
of  the  Panama  Canal  the  rules  embodied  in  the  convention  of  Constan- 
tinople for  the  free  navigation  of  the  Suez  Canal,  it  may  be  proper  to  con- 
sider for  a  moment  the  construction  that  the  powers  signatory  to  that  conven- 
tion have  placed  upon  it.  It  should  be  understood  that  the  Suez  Canal  was 
built  by  a  private  corporation  through  territory  over  which  the  Ottoman  Empire 
exercised  the  attributes  of  sovereignty.  While  a  portion  of  its  stock  is  at 
present  owned  by  the  British  Government  through  purchase  from  the  Khedive 
of  Egypt,  the  canal  is  operated  by  a  private  company.  It  has  been  the  practice 
of  some  of  the  powers  that  signed  the  treaty  of  Constantinople  to  favor  by 
95272—12090 


58 

subsidy  or  otherwise  their  own  vessels  using  the  Suez  Canal.  According  to  the 
report  of  the  Commissioner  of  Navigation  for  1011,  the  Russian  Government  in 
1908  appropriated  the  sum  of  $334,750  for  the  purpose  of  repaying  the  tolls 
exacted  of  Russian  vessels  passing  through  the  canal  to  and  from  Russian 
ports.  The  right  of  Russia  to  do  this  under  the  treaty  of  Constantinople  has 
passed  unquestioned,  yet  we  are  confronted  at  the  threshold  of  this  controversy 
with  the  strange  proposition  that  the  United  Stales,  having  adopted  the  rules  of 
the  convention  of  Constantinople,  are  prevented  from  doing  the  same  thing  that 
other  nations  under  that  convention  have  done.  The  construction  that  the  powers 
signatory  to  the  treaty  of  Constantinople  have  given  that  instrument  clearly 
supports  our  right  under  the  Hay-Pauncefote  treaty  to  favor  our  own  shipping ; 
and  if  we  have  the  right  to  collect  the  tolls  at  the  canal  and  repay  them,  we 
certainly  have  the  right  to  remit  them  in  the  first  instance.  As  stated  in  the 
minority  report : 

It  is  unnecessary  to  resort  to  a  device  or  subterfuge  in  order  to  do  indirectly  what  we 
have  a  right  to  do  directly. 

*****  *  * 

The  bill  now  under  consideration  expressly  reserves  the  right  of  the  United 
States  to  pass  its  own  ships  of  war  through  the  canal  without  the  payment  of 
tolls,  notwithstanding  the  fact  that  the  treaty  provides — 

the  canal  shall  be  free  and  open  to  vessels  of  commerce  and  of  war  of  all  nations  observ- 
ing these  rules  on  terms  of  entire  equality. 

The  minority  of  your  committee  confess  their  inability  to  see  the  consistency 
of  the  position  assumed  by  the  majority  of  the  committee  that  free  tolls  to  our 
ships  of  commerce  would  violate  the  treaty,  but  that  free  tolls  to  our  ships  of 
war  would  not  violate  the  treaty.  In  attempting  to  justify  the  right  of  the 
United  States  to  exempt  our  war  vessels  from  the  payment  of  tolls,  while  deny  ing 
our  right  to  exempt  our  vessels  of  commerce,  the  majority  of  the  committee  take 
refuge  behind  article  2  of  the  treaty  which  gives  the  Government  of  the  United 
States — 

all  the  rights  incident  to  such  construction  as  well  as  the  exclusive  right  of  providing  for 
the  regulation  and  management  of  the  canal. 

Let  us  examine  this  for  a  moment.  The  full  text  of  article  2  reads  as 
follows : 

It  is  agreed  that  the  canal  may  be  constructed  under  the  auspices  of  the  Government 
of  the  United  States  either  directly  at  its  own  cost  or  by  gift  or  loan  of  money  to  indi- 
viduals or  corporations,  or  through  subscriptions  to  or  purchase  of  stocks  or  shares,  ancl 
that  subject  to  the  provisions  of  the  present  treaty,  the  said  Government  shall  have  and 
enjoy  all  the  rights  incident  to  such  construction  as  well  as  the  exclusive  right  of  provid- 
ing for  the  regulation  and  management  of  the  canal. 

It  will  be  observed  that,  subject  to  the  provisions  of  the  present  treaty,  this 
Government  has  the  exclusive  right  of  providing  for  the  regulation  and  manage- 
ment of  the  canal ;  and  one  of  the  provisions  of  the  present  treaty  is  that  the 
canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all 
nations  observing  these  rules  on  terms  of  entire  equality.  If  this  language  is 
to  be  so  construed  as  to  prevent  us  from  preferring  our  ships  of  commerce,  it 
must  also  apply  wTith  equal  force  to  our  ships  of  war.  In  other  words,  under 
any  fair  construction  of  the  treaty  we  can  not  exclude  from  its  provisions  vessels 
of  war  and  include  vessels  of  commerce.  Either  we  have  the  power  to  exempt 
both  from  the  payment  of  tolls  or  the  power  to  exempt  neither. 

******* 

There  is  an  inherent  distinction  in  nature  and  purpose  between  a  treaty  of 
commerce  and  navigation  and  the  Hay-Pauncefote  treaty.  Treaties  of  the  tirst- 
mentioned  type  are  made  for  the  purpose  of  securing  reciprocal  liberty  of  com- 
merce and  navigation  between  the  contracting  parties.  The  Hay-Pauncefote 
treaty  was  entered  into  for  the  purpose  of  facilitating  the  construction  of  a  ship 
canal  connecting  the  two  oceans.  Our  treaties  Of  commerce  and  navigation  are 
reciprocal  in  character.  The  Hay-Pauncefote  treaty,  to  all  intents  and  purposes, 
is  largely  unilateral.  In  other  words,  we  get  nothing  from  other  countries  in 
return  for  opening  up  this  great  canal  to  the  commerce  of  the  world.  The  only 
condition  we  exact  is  that  all  nations,  their  citizens  and  subjects,  shall  observe 
the  rules  which  we  have  adopted  as  the  basis  for  the  neutralization  of  the  canal. 
By  our  treaties  of  commerce  and  navigation  we  obtain  the  right  to  enter  the 
ports,  places,  and  rivers  of  foreign  countries  and  in  return  grant  their  citizens 
95272 — 12090 


59 

and  subjects  the  same  privilege  in  our  own  ports,  places,  ami  rivers.  Our 
present  agreement  with  Canada,  regarding  the  use  of  the  Soo  and  Welland 
Canals,  is"  a  reciprocal  agreement.  By  it  we  permit  the  free  use  of  the  Soo 
Canal  by  Canadian  vessels  and  receive  our  Quid  pro  quo  in  the  free  use  of  the 
Welland  Canal  by  American  vessels.  In  every  treaty  of  commerce  and  naviga- 
tion in  which  we  reserve  the  coastwise  trade  from  its  operation  the  reservation 
is  merely  declaratory  of  the  law  of  1817,  excluding  foreign  vessels  from  that 
trade. 

Our  treaty  of  commerce  and  navigation  with  Great  Britain  contains  no  reser- 
vation of  our  coastwise  trade  for  the  reason  that  it  was  entered  into  before  the 
navigation  act  of  1817  was  passed.  In  that  treaty  it  was  provided  that — 

no  higher  or  other  duties  or  charges  shall  be  imposed  in  any  ports  of  the  United  States  on 
British  vessels  than  those  payable  in  the  same  ports  by  vessels  of  the  United  States. 

The  Supreme  Court  of  the  United  States  in  the  case  of  Olsen  v.  Smith  (195 
U.  S.,  332)  held  that  this  treaty  was  not  violated  by  either  a  State  or  Federal 
statute  that  exempted  the  coastwise  trade  of  the  United  States  from  the  pay- 
ment of  pilotage  charges  on  the  ground  that  such  an  exemption  did  not  operate 
to  produce  a  discrimination  against  British  vessels. 

******* 

Mr.  Chairman,  we  stand  to-day  upon  the  threshold  of  the  opening  of  this 
great  canal,  the  most  stupendous  enterprise  of  this  or  any  other  age.  About  to 
realize  the  dream  of  years,  the  heart  of  every  American  thrills  with  pride  as  he 
contemplates  the  successful  prosecution  of  this  great  work  under  the  American 
flag.  In  dedicating  it  to  the  perpetual  use  of  all  mankind  let  us  preserve  invio- 
late the  great  principle  of  free  commerce  between  the  States  and  thus  guarantee 
to  the  American  people  the  full  and  complete  benefits  to  which  they  are  honestly 
entitled.  [Prolonged  applause.] 

FROM  SPEECH  OF  HON.   ROBERT   F.   BROUSSARD,   OF  LOUISIANA, 
IN   THE    HOUSE   OF   REPRESENTATIVES    MAY   21,    1912. 

Mr.  BROUSSARD.  Mr.  Chairman,  I  purpose  to  discuss  the  proposition  sub- 
mitted to  the  House  by  the  gentleman  from  Michigan  [Mr.  DOREMUS]  without 
in  anywise  attempting  to  decry  those  gentlemen  who  do  not  agree  with  me  upon 
this  proposition. 

******* 

In  my  opinion  foreign  nations  have  no  concern  whatever,  so  far  as  our  coast- 
wise navigation  laws  are  concerned,  in  what  enactment  may  be  made  by  this 
Congress  relating  to  coastwise  trade,  whether  that  trade  goes  through  the  canal 
or  otherwise,  because  no  foreign  vessel  is  permitted  to  engage  in  our  coastwise 
trade.  Only  American  vessels  are  permitted  to  engage  in  that  business,  and  I 
do  not  see  how  it  is  possible  for  anyone  to  construe  the  fact  that  we  propose 
to  permit  vessels  in  which  no  foreign  nation  has  any  interest  whatever,  in  which 
they  never  have  had  any  interest  since  the  enactment  of  the  coastwise  naviga- 
tion laws  of  this  country.  I  do  not  see  how  any  of  these  nations  can  possibly 
be  interested  in  any  legislation  which  may  be  enacted  by  this  or  any  future 
Congress,  so  long  as  these  laws  are  upon  the  statute  books. 

******* 

*  *  *  rrlie  owner  Of  a  foreign  vessel  can  not  complain  that  he  is  being  dis- 
criminated against  in  favor  of  a  vessel  the  character  of  traffic  from  which  he  is 
already  excluded  by  law  and  from  which  it  is  excluded  at  this  time  of  the  cutting 
of  the  canal.  The  fact  that  an  American  vessel  doing  business  between  ports  in 
the  different  States  of  the  Union  and  doing  business  that  is  purely  interstate  is 
receiving  a  preference  can  not  be  the  basis  of  complaint  on  the  part  of  any 
vessel  not  permitted  by  law  to  participate  in  such  commerce. 

So  far  as  I  am  concerned,  I  am  in  favor  of  allowing  every  vessel  flying  the 
United  States  flag  to  go  through  the  canal  without  paying  any  tolls  at  all.  I 
stand  upon  that  proposition. 

But  we  who  have  been  opposed  to  any  tolls  upon  vessels  doing  a  coastwise 
business  have  felt  that  the  argument  which  has  been  ingeniously  presented  upon 
this  floor  to  the  effect  that  there  is  a  discrimination  that  violates  the  treaty 
between  England  and  this  country  might  prevail  if  we  extended  the  benefits 
of  this  exclusion — not  subsidy — to  American  vessels  engaged  in  the  foreign 
trade,  and  that  it  might  possibly  by  such  argument  bring  us  into  complications 

95272—12090 


60 

with  foreign  nations  at  the  very  moment  of  opening  the  canal.  We  have  been 
anxious  that  there  shall  be  no  complication  when  the  canal  is  opened,  in  order 
that  we  might  invite  the  trade  of  the  world  to  go  through  that  canal,  instead 
of  having  controversies  through  the  State  Department  of  this  Government  with 
foreign  nations  engaged  in  foreign  trade  going  also  through  the  canal. 

Now,  I  can  not  see  how  anyone  can  claim  that  there  is  a  discrimination 
because  of  the  fact  that  that  traffic  from  which  all  nations  of  the  world  are 
excluded  is  given  preference  over  traffic  in  which  all  other  nations  are  per- 
mitted to  participate.  *  *  * 

Now,  I  understand  from  the  debate  that  has  occurred  on  this  floor  that  gentle- 
men are  arguing  that  we  ought  to  impose  tolls  upon  American  vessels  engaged 
in  the  coastwise  trade,  because  we  need  the  money.  That  is  not  borne  out  by 
the  testimony  before  the  committee.  The  testimony  is  this,  that  according  to 
the  estimation  of  Prof.  Johnson,  in  whom  everybody  who  knows  anything 
about  the  subject  has  great  confidence,  the  canal  will  carry,  in  the  first  year, 
a  tonnage  of  over  ten  and  one-half  million  tons,  and  of  that  tonnage  only 
1,600,000  tons  will  consist  of  coastwise  traffic.  The  estimate  of  Col.  Goethals 
is  to  the  effect  that  the  cost  of  maintaining  the  canal  will  be  only  $4,000,000 
a  year,  and  that  with  the  profits  accruing  to  us  by  virtue  of  the  fact  that  under 
this  bill  coaling  stations,  and  so  forth,  will  be  operated  by  the  Government,  this 
cost  will  be  reduced  to  $3,500,000.  It  is  estimated  that  with  a  toll  of  $1  a  ton 
a  revenue  of  over  $9,000,000  would  be  derived  with  which  to  operate  the  canal. 
If  you  exclude  the  coastwise  trade  you  would  still  have  $8,500,000,  with  which 
to  pay  an  expenditure  of  $3,500,000. 

Now,  where  is  the  necessity  of  putting  on  this  toll?  And  yet  gentlemen  who 
are  opposed  to  the  granting  of  free  passage  to  American  ships  engaged  in  the 
coastwise  traffic  assert  that  the  failure  to  tax  coastwise  traffic  is  a  subsidy.  I 
wrill  tell  you  where  the  subsidy  is.  The  sub.sidy  is  not  in  favor  of  American 
vessels  that  will  pass  through  the  canals,  but  the  subsidy  is  to  the  railroads. 
[Applause.]  Do  not  talk  to  me  about  subsidies.  Why,  to  carry  the  argument 
to  a  logical  conclusion  of  the  gentlemen  who  claim  it  as  a  subsidy  to  the  vessels, 
suppose  we  should  put  a  tax  of  $10  a  ton  on  every  vessel  in  the  coastwise  trade 
going 'through  the  canal,  there  would  not  be  a  ton  go  through,  but  the  railroads 
would  charge  the  American  consumer  every  cent  of  the  $10  in  the  transportation 
of  freight  and  in  supplying  the  demands  of  those  who  live  on  the  coast  just 
as  they  would  those  living  in  the  interior  of  the  country.  Why,  gentlemen,  the 
subsidy  is  for  the  railroads.  We  put  in  the  bill  a  maximum  of  $1.25  a  ton. 
Everybody  admits  that  the  tax  will  only  be  a  dollar  in  order  to  permit  this 
canal  to  compete  with  the  Suez  Canal.  WTill  anyone  say,  as  the  President  has 
declared  for  $1  a  ton,  that  the  25  cents  not  charged  is  a  subsidy,  or  will  it  be 
construed  as  a  remission  of  authorized  charges? 

The  subsidy  is  for  the  railroad.  No  man  came  before  the  committee  asking 
for  the  imposition  of  a  tax  on  the  steamship  companies  except  the  men  who  were 
engaged  in  railroad  business  carrying  freight  from  coast  to  coast.  [Applause.] 
The  charge  of  tolls  is  the  subsidy  to  the  railroads,  and  those  who  talk  of  sub- 
sidy had  better  look  to  it.  The  American  people  are  wise  to  it,  and  if  you  look 
at  resolutions  adopted  in  every  commercial  body,  not  only  on  the  coast,  but  in 
the  inland  cities  of  the  country,  yon  will  find  that  there  is  no  one  interested  in 
these  tolls  but  the  transcontinental  railroad  companies.  Every  dollar  that  you 
add  to  the  tax  of  a  ton  of  freight  that  crosses  through  the  canal  enables  the 
railroads  to  add  the  tax  onto  a  similar  ton  of  freight  in  carrying  it  across 
the  continent  or  in  delivering  it  in  the  interior  of  the  country. 


FROM  SPEECH  OF  HON,   GEORGE  E.   CHAMBERLAIN,   OP  OREGON, 
IN  THE  SENATE  OF  THE  UNITED  STATES  AUGUST  7,   1912. 

Mr.  CHAMBERLAIN.  Mr.  President,  for  one  I  believe  that  Congress  should 
take  a  positive  stand  in  the  assertion  of  its  right  to  prescribe  rules  for  the  use  of 
the  canal  by  American  vessels  discriminatory,  it  may  be,  but  in  line  with  the  best 
interests  of  a  people  whose  money  has  been  expended  in  the  acquirement  of  the 
Panama  Canal  Zone  and  in  the  construction  of  the  greatest  engineering  work 
of  modern  times,  and  upon  whose  shoulders  for  all  time  to  come  must  rest  the 
burden  of  the  maintenance  and  upkeep  of  the  canal. 

I  maintain  that  this  can  be  done  without  doing  violence  to  any  provision  of 
any  treaty  that  has  been  made  or  that  now  exists  between  Great  Britain  and 
95272 — 12090 


61 

the  United  States.  *  *  *  Where  others  have  failed  the  United  States  has 
succeeded,  but  in  the  negotiations  which  preceded  the  work  of  construction  the 
United  States,  through  its  diplomatists  and  Congress,  canie  near  to  abandoning 
the  Monroe  doctrine,  a  doctrine  proclaimed  almost  a  century  ago  to  protect  the 
American  continent  from  the  intrigues  and  interferences  of  foreign  powers. 

While  I  do  not  propose  to  trace  the  events  which  preceded  the  execution  of 
the  Clayton-Bulwer  treaty,  I  call  attention  to  tlie  fact  that  all  the  correspond- 
ence and  negotiations  between  the  two  Governments  on  the  subject  lead  inevi- 
tably to  the  conclusion  that  its  principal  purpose  was  to  bring  about  the  con- 
struction of  a  particular  interoceanic  canal  on  foreign  soil  "  between  the  Atlantic 
and  Pacific  Oceans  by  the  way  of  the  River  San  Juan  de  Nicaragua  and  either 
or  both  of  the  lakes  of  Nicaragua  or  Managua,  to  any  port  or  place  on  the 
Pacific  Ocean." 

Mr.  President,  in  proof  of  this  I  call  the  attention  of  the  Senate  to  the  pre- 
amble of  the  Clayton-Bulwer  treaty.  It  recites  in  terms  that  the  purpose  of 
the  convention  was  the  construction  of  a  canal  across  Nicaragua  along  a  defi- 
nite line  and  through  a  particular  river  and  lakes.  There  is  not  a  single  refer- 
ence in  that  convention  anywhere,  not  a  line,  not  a  syllable,  not  a  word  from 
which  anybody  can  draw  a  conclusion  that  the  signatory  powers  had  in  mind 
any  place  except  the  construction  of  that  particular  canal  in  that  particular 
place,  and  in  every  section  of  the  treaty  it  refers  to  that  canal  only;  that  is, 
a  canal  crossing  Nicaragua  through  specified  rivers  and  lakes. 

All  who  have  looked  into  this  subject  at  all  know  that  the  reasons  which 
brought  Great  Britain  into  the  negotiation  for  the  treaty  was  the  fact  that 
she  claimed  to  have  some  rights  in  the  San  Juan  River  and  that  there  was  a 
question  as  to  the  right  of  the  Nicaragua  Government  to  make  a  treaty  with 
the  United  States  that  should  attempt  to  divest  Great  Britain  of  these  asserted 
rights. 

******* 

Mr.  President,  I  say  that  the  signatory  powers  had  one  particular  object, 
and  that  was  to  construct  the  canal  in  a  particular  part  of  a  foreign  territory. 
I  call  the  attention  of  Senators  to  this  statement  in  article  6  of  the  treaty : 

And  the  contracting  parties  likewise  agree  that  each  shall  enter  into  treaty  stipula- 
tions with  such  of  the  Central  American  States  as  they  may  deem  advisable,  for  the 
purpose  of  more  effectually  carrying  out  the  great  design  of  this  convention,  namely,  that 
of  constructing  and  maintaining  the  said  canal  as  a  ship  communication. 

The  words  said  canal  referring  to  the  canal  which  is  mentioned  in  the  pre- 
amble of  the  convention,  and  that  was  the  one  across  Nicaragua.  Now,  up  to 
the  eighth  section  of  the  treaty  to  which  the  Senator  from  Iowa  has  just  called 
attention  there  is  no  reference  to  any  other  canal. 

Section  8  provides: 

The  Governments  of  the  United  States  and  Great  Britain  having  not  only  desired,  in 
entering  into  this  convention,  to  accomplish  a  particular  object — 

And  that  is  the  object  stated  in  section  6 — 

but  also  to  establish  a  general  principle,  they  hereby  agree  to  extend  their  protection,  by 
treaty  stipulations,  to  any  other  practicable  communications. 

Now,  Mr.  President,  the  particular  object  which  the  signatory  powers  had  in 
view  was  to  build  a  canal  across  Nicaragua,  with  a  secondary  purpose  of  main- 
taining the  general  principle  of  neutrality,  and  that  was  to  be  accomplished 
not  by  that  treaty,  not  by  any  arrangement  which  existed  between  Great  Britain 
and  the  United  States  at  that  time,  but  by  subsequent  treaty  stipulations.  So 
the  secondary  purpose  of  the  Clayton-Bulwer  treaty  was  the  establishment  or 
the  maintaining  of  the  general  principle  of  neutrality  as  to  any  canal,  and  that 
was  left  open  entirely  to  subsequent  negotiations  between  the  two  Governments. 

I  take  the  position  that  there  has  never  been  a  time,  so  far  as  Great  Britain 
was  concerned,  when  the  United  States  could  not  have  proceeded  to  the  con- 
struction of  a  canal  across  the  present  route,  and  that  the  matter  of  the  adop- 
tion of  rules  and  regulations  for  its  use  was  left,  even  under  the  terms  of  the 
eighth  article  of  the  Clayton-Bulwer  treaty,  to  tha  voluntary  treaty  stipulations 
of  the  two  powers  subsequently  to  be  entered  into.  I  claim  further  that  the 
Hay-Pauncefote  treaty  was  unnecessary  in  so  far  as  it  was  intended  to  super- 
Fede  the  Clayton-Bulwer  treaty,  and  that  its  only  effect  has  been  to  make  acute 
the  issues  involved  in  the  Clayton-Bulwer  treaty,  which  had  practically  been 
terminated  by  repeated  violations  of  its  terms  by  the  British  Government,  and 
latterly  by  a  practical  abandonment. 
95272—12000 


62 

I  never  did  know  and  I  have  never  been  able  to  understand  why  the  United 
States  ever  deemed  it  necessary  to  enter  into  the  Hay-Pa  uncefote  treaty.  The 
Clayton-Bulwer  treaty  having  ben  confined  to  one  particular  territory,  when  the 
plan  of  construction  across  that  territory  was  abandoned  by  the  United  States 
and  another  place  selected  it  was  absolutely  unnecessary  for  this  Government 
to  have  entered  into  any  treaty  negotiations  with  Great  Britain  as  to  the  con- 
sruction  of  a  canal  at  any  other  point 

I  would  be  interesting  but  would  subserve  no  useful  purpose  in  this  discus- 
sion to  show  the  constructions  that  have  been  placed  upon  the  Clayton-Bulwer 
treaty  both  by  this  country  and  Great  Britain  It  is  sufficient  to  say  that  at 
no  time  since  its  execution  has  the  American  construction,  nor,  I  may  sny,  com- 
mon-sense construction,  thereof  been  observed  by  the  British  Government,  for 
although  the  parties  to  it  jointly  agreed  not  to  exercise  dominion  over  or  fortify 
or  colonize  Nicaragua,  Costa  Rica,  the  Mosquito  Coast,  or  any  part  of  Central 
America,  Great  Britain  continued,  against  our  protest,  to  exercise  dominion  over 
Belize,  or  British  Honduras,  which  exceeds  in  area  the  States  of  Massachu- 
setts, Rhode  Island,  arid  Connecticut;  and  in  other  respects,  against  the  protests 
of  this  Government,  a  construction  has  been  placed  upon  this  treaty  totally  at 
variance  with  its  terms  and  with  the  American  idea.  Immediately  after  its 
execution  disputes  arose  between  the  two  Governments  in  reference  to  the 
refusal  of  Great  Britain  to  observe  its  terms,  which  led  to  prolonged  diplomatic 
correspondence. 

In  this  connection  I  quote  from  a  letter  of  Gen.  Cass,  Secretary  of  State,  to 
Ix>rd  Napier,  of  date  May  29,  1857: 

The  Clayton-Bulwer  treaty,  concluded  in  the  hope  thai  it  would  put  an  end  to  the 
differences 'which  had  arisen  between  the  United  States  and  Great  Britain  concerning  Cen- 
tral American  affairs,  has  been  rendered  inoperative  in  some  of  its  most  essential  pro- 
visions by  the  different  constructions  which  had  been  reciprocally  given  to  it  by  the 
parties,  and  little  is  hazarded  in  saying  that  had  the  interpretation  since  put  upon  the 
treaty  by  the  British  Government,  and  yet  maintained,  been  anticipated  it  would  not  have 
been  negotiated  under  the  instructions  of  any  Executive  of  the  United  States  nor  ratified 
by  the  branch  of  the  Government  intrusted  with  the  power  of  ratification. 

A  protracted  discussion,  in  which  the  subject  was  exhausted,  failed  to  reconcile  the 
conflicting  views  of  the  parties  ;  and  as  a  last  resort  a  negotiation  was  opened  for  the 
purpose  of  forming  a  supplementary  treaty  which  should  remove,  if  practicable,  the  diffi- 
culties in  the  way  of  their  mutual  good  understanding  and  leave  unnecessary  any  further 
discussion  of  the  controverted  provisions  of  the  Clayton-Bulwer  treaty.  It  was  to  effect 
this  object  that  the  Government  of  the  United  States  agreed  to  open  the  negotiations 
which  terminated  in  the  treaty  of  October  17,  1856,  and  though  the  provisions  of  that 
instrument,  even  with  the  amendments  proposed  by  the  Senate,  were  not  wholly  unob- 
jectionable either  to  that  body  or  to  the  President,  still,  so  important  did  they  consider  a 
satisfactory  arrangement  of  this  complicated  subject  that  they  yielded  their  objections 
and  sanctioned  by  their  act  of  ratification  the  convention  as  amended.  It  was  then  trans- 
mitted to  London  for  the  consideration  of  Her  Britannic  Majesty's  Government,  and, 
having  failed  to  meet  its  approbation,  has  been  returned  unratified.  The  parties  are  thus 
thrown  back  upon  the  Clayton-Bulwer  treaty,  with  its  disputed  phraseology  and  its  con- 
flicting interpretations  ;  arid,  after  the  lapse  of  seven  years,  not  one  of  the  objects  con- 
nected with  the  political  condition  of  Central  America  which  the  United  States  had  hoped 
to  obtain  by  the  arrangement  has  been  accomplished. 

This  letter  calls  attention  in  express  terms  to  the  fact  that  within  seven  years 
after  the  execution  of  the  treaty  Great  Britain  was  doing  just  exactly  what  she 
had  agreed,  or  at  least  as  this  Government  thought  she  had  agreed,  in  the  Clay- 
ton-Bulwer treaty  that  she  would  not  do.  I  have  not  a  doubt,  and  I  am  sure 
that  those  who  carried  on  this  correspondence  with  the  British  authorities  had 
no  doubt,  that  it  was  the  understanding  of  the  United  States  that  Great  Britain, 
under  the  terms  of  the  Clayton-Bulwer  treaty,  would  abandon  her  claims  to 
every  portion  of  Central  America  occupied  by  her  at  the  time  of  the  execution 
of  the  treaty. 

As  late  as  December  8,  1857,  while  these  controversies  were  still  waging. 
President  Buchanan  sent  to  Congress  a  message  calling  attention  to  the  fact, 
in  which  he  says: 

Since  the  origin  of  the  Government  we  have  been  employed  in  negotiating  treaties  with 
that  power  and  afterwards  in  discussing  their  time  intent  and  meaning. 

I  may  say,  parenthetically,  that  we  are  still  engaged  in  that  work. 

In  this  respect  the  convention  of  April  19,  1850,  commonly  called  the  Clayton  and 
Bulwer  treaty,  has  been  the  most  unfortunate  of  all,  because  the  two  Governments  place 
directly  opposite  and  contradictory  constructions  upon  its  first  and  most  important 
article.  Y/hilst  in  the  United  States  we  believed  that  this  treaty  would  place  both  powers 
unon  an  exact  equality  by  the  stipulation  that  neither  will  ever  "  occupy  or  fortify  or 
colonize  or  assume  or  exercise  any  dominion  "  over  any  part  of  Central  America,  it  is 
contended  by  the  British  Government  that  the  true  construction  of  this  language  has  left 
them  in  the  rightful  possession  of  ail  that  portion  of  Central  America  which  was  in 
their  occupancy  at  the  date  of  the  treaty. 

95272—12090 


63 

In  other  words,  Great  Britain  bad  not  abandoned  a  foot  of  her  territory  or 
released  a  single  claim  that  she  had  been  asserting. 

In  fact,  that  the  treaty  is  a  virtual  recognition  on  the  part  of  the  United  States  of  the 
right  of  Great  Britain,  either  as  owner  or  protector,  to  the  whole  extensive  coast  of 
Central  America,  sweeping  round  from  the  Rio  Hondo  to  the  port  and  harbor  of  San 
Juan  de  Nicaragua,  together  with  the  adjacent  Bay  Islands,  except  the  comparatively 
small  portion  of  this  between,  the  Sarstoon  and  Cape  Honduras.  According  to  their 
construction — 

That  is,  the  British  construction — 

the  treaty  does  no  more  than  simply  prohibit  them  from  extending  their  possessions  in 
Central  America  beyond  the  present  limits.  It  is  not  too  much  to  assert  that  if  in  the 
United  States  the  treaty  had  been  considered  susceptible  of  such  a  construction  it  never 
would  have  been  negotiated  under  the  authority  of  the  President,  nor  would  it  have 
received  the  approbation  of  the  Senate.  The  universal  conviction  in  the  United  States 
was  that  when  our  Government  consented  to  violate  its  traditional  and  time-honored 
policy  and  to  stipulate  with  a  foreign  Government  never  to  occupy  or  acquire  territory 
in  the  Central  American  portion  of  our  continent  the  consideration  for  this  sacrifice  was 
that  Great  Britain  should,  in  this  respect  at  least,  be  placed  in  the  same  position  with 
ourselves. 

Mr.  Buchanan  calls  attention  in  this  message  to  the  fact  that  attempts  upon 
the  part  of  this  Government  to  bring  about  an  adjustment  of  differences  grow- 
ing out  of  the  Clayton-Bulwer  treaty  had  proved  abortive,  and  expressed  the 
hope  that  a  reasonable  adjustment  of  the  Central  American  questions  might 
finally  be  reached  between  the  two  Governments. 

On  December  3,  1860,  President  Buchanan  again  sent  a  message  to  Congress, 
in  which  he  advised  Congress  that  the  discordant  constructions  of  the  Clayton- 
Bnhver  treaty,  which  at  different  periods  bore  a  threatening  aspect,  had  re- 
sulted in  a  final  settlement  entirely  satisfactory  to  this  Government,  and  this 
through  the  execution  of  treaties  between  the  Republics  of  Honduras  and 
Nicaragua  and  the  British  Government ;  but  this  statement  was  not  justified 
by  subsequent  proceedings,  and  negotiations  between  the  two  Governments  con- 
tinued, and  even  after  the  execution  of  the  Hay-Pauncefote  treaty  they  are  con- 
tinuing, and  the  time  has  now  arrived  when  this  Government  place  a  construc- 
tion upon  the  Hay-Pauncefote  treaty  in  line  with  the  views  that  have  been  ex- 
pressed by  former  Presidents  and  Secretaries  of  State,  not  inconsistent  with  the 
terms  of  the  treaty  but  entirely  consistent  with  American  interests  and  with 
the  doctrine  as  enunciated  by  President  Monroe  in  1823. 

Coining  now  to  the  Hay-Pauncefote  treaty,  I  insist  that  there  is  nothing  in  it 
which  would  prevent  discriminatory  tolls  or  free  tolls  to  vessels  engaged  in  the 
coastwise  traffic. 

I  am  not  so  sure  but  that  under  the  terms  of  that  treaty  we  not  only  have  the 
power  to  grant  discriminatory  or  even  free  tolls  to  our  coastwise  traffic,  but 
we  have  the  right  to  treat  American  vessels  engaged  in  foreign  commerce  on  a 
different  basis  from  foreign  vessels  engaged  in  foreign  commerce,  and,  although 
it  is  probably  not  the  time  to  do  it  now,  the  time  will  come  when  this  Govern- 
ment will  insist  on  its  right  to  grant  discriminatory  tolls  to  Amercau  vessels 
engaged  in  foreign  commerce. 

I  venture  to  suggest  that  although  it  in  terms  supersedes  the  Clayton-Bulwer 
treaty,  it  by  no  means  settles  and  adjusts  the  controversies  between  Great 
Britain  and  the  United  States  which  grow  out  of  the  Clayton-Bulwer  treaty. 

I  call  attention  to  the  Hay-Pauncefote  treaty  for  just  a  moment.  The  first 
draft  of  this  treaty  that  came  to  the  Senate  of  the  United  States  proposed  that 
both  Great  Britain  and  the  United  States  were  to  formulate  the  rules  that  were 
to  govern  the  use  of  the  canal,  practically  placing  a  joint  protectorate  over 
the  use  of  any  canal  that  might  be  completed.  I  am  not  admitting  here  for  a 
moment  that  we  had  then  in  view  the  construction  of  a  canal  over  our  own 
territory,  but  the  construction  of  a  canal  over  some  other  territory  than  our 
own.  The  purpose  at  first  was  to  allow  both  Governments  to  have  jurisdiction 
over  the  fixing  of  rules  and  regulations  for  the  conduct  of  the  canal.  When  it 
was  finally  agreed  upon  and  after  amendments  made  in  the  Senate  this  provision 
was  changed  and  article  2  of  the  Hay-Pauncefote  treaty  provides: 

It  is  agreed  that  the  canal  may  be  constructed  under  the  auspices  of  the  Government 
of  the  United  States,  either  directly  at  its  own  cost  or  by  gift  or  loan  of  money  to  indi- 
viduals or  corporations  or  through  subscription  to  or  purchase  of  stock  or  shares,  and 
that,  subject  to  the  provisions  of  the  present  convention,  the  said  Government  shall  have 
and  enjoy  all  the  rights  incident  to  such  construction,  as  well  as  the  exclusive  right  of 
providing  for  the  regulation  and  management  of  the  canal. 

Now,  Mr.  President,  what  are  the  rights  incident  to  construction  and  what 
are  the  rights  as  to  the  exclusive  authority  of  providing  for  the  regulation  and 

95272—12090 


64 

management  of  the  canal?  It  has  been  stated  here  that  article  2  is  controlled 
by  article  3.  It  was  stated  on  the  floor  of  the  Senate,  in  answer  to  a  question 
put  to  the  Senator  from  Mississippi  [Mr.  PERCY],  that  the  United  States  had 
absolutely  no  rights  that  were  not  granted  under  the  terms  of  the  treaty  to 
Great  Britain  or  to  any  other  power  on  the  face  of  the  earth.  I  certainly 
dissent  to  that  view. 

******* 

Mr.  President,  I  insist  that  section  2  gives  to  the  United  States  the  exclusive 
right  to  provide  for  the  regulation  and  management  of  the  canal.  Article  3  of 
the  treaty  is  not  a  positive  and  binding  obligation  upon  this  Government;  it  is 
a  directory  provision  only  that  the  basis  of  the  neutralization  of  the  ship  canal 
shall  be  substantially  as  embodied  in  the  convention  of  Constantinople.  In 
other  words,  the  convention  of  Constantinople  was  to  be  a  substantial  basis  for 
such  rules  as  the  United  States  might  adopt  for  the  use  of  the  canal  by  other 
powers. 

That  the  United  States  was  not  understood  to  be  included  within  the  words 
"  all  nations  "  at  the  time  the  treaty  was  ratified  by  the  Senate,  has  been  affirmed 
by  the  distinguished  Senator  from  Massachusetts,  and  he  has  expressly  stated 
in  this  Chamber  that  if  he  had  known  at  the  time  the  treaty  was  reported  by 
him  from  the  Committee  on  Foreign  Relations  of  the  Senate  that  the  words 
"  all  nations "  embraced  the  United  States,  he  would  not  for  a  moment  have 
assented  to  such  construction. 

#  #  #  *  :;;  v  * 

Can  it  be  that  The  Hague  tribunal — even  if  the  questions  involved  can  ever 
reach  it — as  is  suggested  by  the  Senator  from  Massachusetts,  is  a  packed 
tribunal,  where  a  case  is  already  prejudiced  against  us,  because  the  interests 
of  the  continental  powers  are  adverse  to  the  interests  of  the  American  people  in 
this  controversy?  If  that  be  true,  Mr.  President,  then  the  Senate  acted  with 
great  wisdom  when  it  declined  to  give  its  consent  to  the  British  and  French 
arbitration  treaties  as  they  came  to  this  body,  and  the  sooner  proceedings  are 
initiated  under  The  Hague  convention  to  withdraw  from  it  the  better  it  will 
be  for  the  American  people. 

To  include  the  United  States  in  the  words  "all  nations"  would  practically 
make  us  powerless  to  protect  ourselves  even  against  an  adversary  in  time  of 
war,  and  we  would  be  placed  in  the  anomalous  position  of  putting  naval  arma- 
ments of  other  nations  through  the  canal  to  destroy  our  coastwise  cities  and 
give  to  them  the  same  facilities  that  we  would  be  allowed  to  give  to  our  own 
vessels  being  transferred  from  one  coast  to  the  other  to  protect  those  same 
cities  against  the  enemy's  vessels.  I  know  that  Senators  have  said  that  the 
condition  of  war  is  an  anomalous  condition  and  that  all  treaties  are  suspended 
during  times  of  war,  and  yet  these  gentlemen  are  sticklers  for  the  strictest 
construction  of  the  language  of  that  treaty.  Their  theory  ought  to  go  the  full 
length,  and  it  ought  to  be  observed  in  time  of  war  as  well  as  any  other  time, 
because  wars  can  not  more  seriously  affect  the  interests  of  the  country  than 
would  our  interests  be  affected  if  the  construction  which  some  Senators  seek 
to  place  upon  this  treaty  is  placed  upon  it. 

*  *  *  *  *  *  * 

In  conclusion,  Mr.  President,  I  appeal  to  the  Senate  to  reject  the  amend- 
ments to  the  bill  which  were  proposed  by  the  Senate  committee  and  to  enact 
it  substantially  as  it  came  from  the  House  of  Representatives.  It  embodies 
the  American  idea;  it  grants  free  tolls  to  ships  engaged  in  coastwise  traffic;  it 
forbids  the  use  of  the  canal  by  railroad  owned  or  controlled  ships  or  ships  in 
which  railroads  have  an  interest.  If  any  complaint  is  to  be  made  against  the 
House  bill  it  is  that  it  ought  to  go  further  and  exempt  or  at  least  discriminate 
in  favor  of  American  ships  engaged  in  foreign  commerce ;  but  that  may  safely 
be  left  to  future  legislation.  The  bill  as  it  came  to  the  Senate  from  the  House 
had  been  carefully  considered  from  every  viewpoint,  extensive  hearings  had 
been  held,  and  the  report  of  the  committee,  with  the  views  of  the  minority  as 
expressed  in  a  separate  report,  both  testified  to  the  care  and  attention  which 
was  given  to  the  measure  while  it  was  before  the  House  committee.  The  people 
of  this  country  will  be  satisfied  with  nothing  less  than  a  bill  substantially  along 
the  lines  of  the  bill  which  passed  the  House  of  Representatives. 

95272—12090 


65 

FROM  SPEECH  OF   HON.   JOSHUA  W.   ALEXANDER,   OF   MISSOURI, 
IN   THE   HOUSE   OF    REPRESENTATIVES   MAY    17,    1912. 

Mr.  ALEXANDER.  Mr.  Chairman,  it  is  impossible  for  me  in  the  time  allotted 
to  me  to  discuss  this  question  as  I  would  like  to.  I  wish  to  discuss  it  from  the 
standpoint  of  the  American  merchant  marine.  I  will  say,  in  passing,  that  I 
am  not  undertaking  to  reflect  the  views  of  the  committee  of  which  I  have  the 
honor  to  be  chairman,  for  I  do  not  know  the  views  of  the  committee  as  a 
whole.  I  do  know,  however,  that  the  members  of  the  Committee  on  the  Mer- 
chant Marine  and  Fisheries  are  all  very  anxious  to  do  something  to  restore  our 
American  merchant  marine  in  the  foreign  trade. 

It  is  true  that  our  coastwise  merchant  marine  is  greater  than  that  of  any 
other  nation,  and  if  we  include  our  coastwise  merchant  marine  we  have  a  larger 
merchant  marine  than  any  other  nation  save  Great  Britain ;  but  it  is  a  source 
of  humiliation  to  American  citizens  that  more  than  90  per  cent  of  our  foreign 
trade  is  carried  in  foreign  ships  and  has  been  for  many  years  past.  I  will  not 
undertake  to  go  into  the  causes  of  the  decline  of  our  American  merchant  marine^ 
They  are  many  and  have  often  been  discussed  on  this  floor.  But  with  this  bill 
pending  I  could  not  let  the  occasion  pass  without  suggesting  to  the  majority 
of  the  Committee  on  Interstate  and  Foreign  Commerce  that,  if  it  may  be  done 
consistently,  they  should  be  willing  and  anxious  to  respond  to  this  demand  and 
concede  something  to  our  American  merchant  marine. 

******* 

I  must  confess  that  the  situation  here  is  an  anomalous  one.  I  would  think 
that  an  American  citizen,  a  Member  of  this  Congress,  jealous  of  the  rights  of 
his  own  country  and  his  own  flag,  would  leave  it  for  some  other  nation  to  con- 
tend that  we  may  not  discriminate  in  favor  of  American  shipping  in  the  matter 
of  tolls  on  the  Panama  Canal.  I  can  very  well  understand  why  the  railroad* 
do  not  want  this  discrimination.  I  can  very  well  understand  why  the  foreign 
shipping  interests  do  not  want  this  discrimination. 

******* 

The  gentleman  from  Minnesota  [Mr.  STEVENS]  in  his  very  able  speech  has 
undertaken  to  prove  that  it  will  be  a  violation  of  the  terms  of  the  Hay-Paunce- 
fote  treaty  for  us  to  discriminate  in  favor  of  our  vessels  in  the  coastwise  trade, 
and  to  support  his  contention  refers  to  the  Welland  Canal.  Yet  the  two  cases- 
are  not  paralleled  in  any  respect. 

We  have  never  asked  Canada  to  let  us  share  in  her  coastwise  trade.  Her 
vessels  have  a  monopoly  of  that  trade,  as  do  our  vessels  of  our  coastwise  trade~ 
The  trade  between  the  United  States  and  Canada  on  the  Great  Lakes  is  foreign 
trade.  The  Welland  Canal  connects  international  waterways — Lakes  Erie  and 
Ontario.  The  canal  is  built  on  Canadian  territory  and  is  under  the  control  of 
the  Dominion  Government.  It  is  true  that  in  1888  and  again  in  1891  representa- 
tions were  made  by  the  United  States  that  the  stipulated  equality  in  the  use  of 
the  canal  was  denied  in  Canada.  The  tolls  charged  on  grain,  flour,  and  certain 
other  articles  passing  through  the  Welland  Canal  amounted  to  20  cents  a  ton, 
but  for  some  years,  by  an  annual  order  in  council  issued  before  the  opening  of 
lake  navigation,  a  rebate  of  18  cents  a  ton  was  granted  on  grain  carried  to 
Montreal  or  points  east  thereof. 

******* 

Later,  the  Canadian  Government,  by  order  in  council  dated  April  7,  1896,. 
abolished  all  fees  previously  exacted  from  vessels  navigating  inland  waters 
when  entering  or  clearing  above  Montreal.  Thus  the  controversy  was  happily 
ended. 

Nevertheless  it  clearly  appears  that  Canada  never  did  concede  that  she  had 
violated  any  of  the  treaty  rights  of  the  United  States.  The  only  way  we  forced 
her  to  make  concessions  to  us  was  by  the  Congress  passing  the  act  of  July  26, 
1892,  by  which  we  gave  Canada  to  understand  that  if  she  did  not  concede  to  us 
reciprocal  treatment  in  the  use  of  the  Welland  Canal  we  would  deny  to  her  the 
free  passage  of  her  vessels  through  the  St.  Marys  Falls  Canal. 

Just  what  that  controversy  and  its  settlement  has  to  do  with  our  right  to> 
grant  to  American  vessels  free  tolls  in  the  use  of  the  Panama  Canal,  I  repeat, 
I  am  unable  to  understand. 

It  might  be  bad  policy  for  us  to  do  as  contended  by  the  gentleman  from  Min- 
nesota [Mr.  Stevens],  but  it  can  not  be  seriously  contended  that  we  violate  the 
95272°— 12090 5 


66 

terms  of  any  treaty  between  ourselves  and  Canada  in  doing  so,  and  it  can  not 
be  seriously  contended  that  Canada  should  be  accorded  equal  treatment  with 
American  vessels  engaged  in  the  coastwise  trade  in  passage  through  the  Panama 
Canal  under  the  Hay-Pauncefote  treaty,  unless  such  treatment  may  be  claimed 
for  the  vessels  of  Great  Britain  and  of  all  other  nations  that  may  apply 
therefor. 

******* 
That  we  have  the  undeniable  right  to  discriminate  in  the  matter  of  Panama 
Canal  tolls  in  favor  of  vessels  of  the  United  States  engaged  in  the  coastwise 
trade  and,  if  we  elect  to  do  so,  grant  them  free  tolls,  is  settled  by  the  decision 
of  the  Supreme  Court  of  the  United  States  in  the  case  of  Olsen  v.  Smith  (195 
U.  S.,  332).  In  that  case  the  treaty  with  Great  Britain  expressly  provided 
that— 

No  higher  or  other  duties  or  charges  shall  be  imposed  in  any  ports  of  the  United 
States  on  British  vessels  than  those  payable  in  the  same  ports  by  vessels  of  the  United 
States. 

The  court  held  that  this  treaty  was  not  violated  by  either  the  Texas  statute 
or  section  4444  of  the  Revised  Statutes  of  the  United  States,  exempting  coast- 
wise steam  vessels  from  the  payment  of  pilotage  charges. 

This  decision,  it  seems  to  me,  should  settle  the  question  once  and  for  all. 
But  in  the  absence  of  any  decision  by  this  great  tribunal,  it  should  be  plain 
that  we  have  the  right  to  treat  our  vessels  engaged  in  the  coastwise  trade  as  we 
please,  in  view  of  the  undisputed  fact  that  no  foreign  vessel  may  participate  in 
that  trade,  and  it  is  no  concern  of  theirs  how  we  treat  our  vessels  in  the  coast- 
wise trade,  whether  we  grant  them  free  tolls  or  not. 

But  it  was  not  my  intention  to  give  this  phase  of  the  subject  more  than  a 
passing  notice. 

The  gentlemen  entertaining  the  contrary  view,  however,  have  expressed  their 
contention  with  such  earnestness  and  plausibility  that  I  have  felt  it  my  duty  to 
give  it  more  extended  notice. 

But  my  contention  is  that  we  may  not  only  discriminate  in  favor  of  vessels 
of  the  United  States  engaged  in  the  coastwise  trade,  but  that  we  may  discrimi- 
nate in  favor  of  vessels  of  the  United  States  engaged  in  the  foreign  trade  in  the 
matter  of  tolls  in  the  use  of  the  Panama  Canal,  and,  following  my  thought  on 
that  subject,  is  it  not  a  little  remarkable  that  the  President  of  the  United 
States,  having  in  view  our  treaty  with  Great  Britain,  should  deliberately  an- 
nounce in  a  message  to  Congress  that,  in  his  opinion,  we  have  a  clear  right  to 
discriminate  in  favor  of  our  shipping,  not  alone  in  the  coastwise  trade,  but  in 
the  foreign  trade  as  well? 

The  former  Secretary  of  War,  Hon.  Henry  L.  Stimson,  in  his  last  annual  report, 
page  54,  is  equally  clear  in  his  opinion  that  the  United  States  may  legally  and 
.morally  relieve  American  vessels  from  payment  of  tolls  for  use  of  the  Panama 
Canal  without  violating  the  provisions  of  the  Hay-Pauncefote  treaty.  I  quote 
his  language: 

Involved  in  the  problem  of  fixing  tolls  is  the  question  whether  the  United  States  has 
the  right  under  the  treaty  to  pay  the  tolls  on  American  vessels  using  the  canal.  An 
examination  of  the  treaty  and  the  surrounding  circumstances  to  my  mind  loaves  no  doubt 
as  to  the  right  of  the  United  States,  both  legally  and  morally,  to  pay  the  tolls  on  its 
vessels.  This  is  a  perfectly  recognized  practice  in  respect  to  the  tolls  of  the  Suez  Canal, 
the  toll  rules  of  which  canal  were  adopted  by  the  United  States  in  the  Hay-Pauncefote 
treaty  for  the  government  of  the  Panama  Canal.  At  least  one  of  our  national  com- 
petitors in  the  use  of  the  Panama  Canal — Spain — has  already  taken  steps  to  provide  for 
the  payment  out  of  her  national  treasury  of  the  Panama  tolls  on  one  of  the  Spanish  linos 
which  will  use  that  canal.  Furthermore,  I  can  see  no  difference,  save  in  form — provided 
the  tolls  for  other  nations  are  kept  reasonable,  as  we  have  also  covenanted  to  do— whether 
the  United  States  should  make  this  appropriation  out  of  her  own  Treasury  to  American 
vessels,  by  receiving  the  toll  money  from  them  first  and  repaying  it  to  them,  or  by 
simply  relieving  them  from  the  payment  of  tolls  in  the  first  place. 

******* 

The  gentleman  from  Minnesota,  in  his  construction  of  the  Hay-Pauncefote 
treaty,  gives  great  significance  to  the  language  in  the  preamble  to  that  treaty — 
that  the  contracting  parties  agreed  that  the  canal  should  be  built  "  without 
impairing  the  general  principle  of  neutralization  established  in  article  8  of  the 
Clayton-Bui wer  treaty/' 

In  fact,  he  reads  them  into  the  treaty  and  would  make  them  a  part  of  the 

treaty.    To  my  mind  that  is  indefensible.    If  we  want  to  have  an  interpretation 

of  those  words,  or  if  we  want  to  see  what  effect  they  have  or  what  scope  and 

meaning  they  shall  have  given  to  them  in  the  treaty,  let  us  go  to  the  treaty 

95272—12090 


67 

itself.  Now,  there  has  been  much  said  on  the  question  of  neutralization,  and 
yet  that  is  a  term  of  wide  significance  which  does  not  allow  a  definite  meaning 
and  which  can  not  be  applied  to  any  specific  treaty  and  made  a  universal  rule 
of  action.  It  has  been  violated  time  and  time  again  in  our  treatment  of  the 
Panama  Canal,  and  to  accept  those  words  as  a  justification  for  the  position  of 
the  committee  that  we  may  not  discriminate  in  favor  of  American  ships  in  the 
use  of  the  Panama  Canal,  to  my  mind  is  entirely  untenable.  Why,  if  we  take 
the  Clayton-Bulwer  treaty  as  a  basis,  or  if  we  undertake  to  interpret  article  8 
of  that  treaty  and  translate  the  spirit  of  that  treaty  into  the  Hay-Pauncefote 
treaty,  we  violate  it  in  many  respects.  We  violated  it  in  our  treaty  with  Panama, 
because  we  expressly  provide  that  ships  of  the  Government  of  Panama  shall 
pass  back  and  forth  through  the  canal  free  of  toll.  It  is  nothing  to  say  that 
her  shipping  in  tonnage  is  negligible.  We  are  contending  for  a  principle,  and 
if  the  contention  of  the  gentlemen  on  the  other  side  is  correct,  then  we  have 
violated  the  spirit  of  that  treaty  in  granting  this  concession  to  Panama.  If  we 
grant  it  to  Panama  we  can  grant  it  to  the  various  Governments  of  South 
America,  but  my  contention  is  that  we  do  not  violate  the  treaty  in  that  regard. 
Then,  again,  in  the  fortification  of  the  canal  we  violate  the  principle  of  neu- 
trality in  its  broad  definition. 

We  are  going  further.  We  propose  to  place  a  military  force  on  the  canal. 
Is  that  simply  to  police  the  canal  and  maintain  order  on  that  lO-mile  strip  that 
luis  been  conceded  us  by  the  Government  of  Panama?  Is  it  possible  that  we 
are  going  to  an  annual  expense  of  about  $10,000,000  for  fortifications  simply  for 
the  purpose  of  policing  the  canal?  Will  it  be  necessary  to  expend  a  larger  sum 
for  that  purpose  after  the  canal  is  completed  than  now  with  many  thousands 
of  people  engaged  in  the  construction  of  the  canal?  Certainly  not.  There  are 
those  on  this  floor  who  have  contended  we  could  not  fortify  the  canal;  that  it 
would  be  a  violation  of  the  treaty  with  Great  Britain.  At  the  same  time,  un- 
challenged by  Great  Britain,  we  are  fortifying  the  canal.  We  are  going  ahead 
to  place  an  army  on  the  Canal  Zone  unchallenged  by  Great  Britain,  not  simply 
for  the  purpose  of  policing  the  canal  alone,  but  to  protect  it  from  hostile  attack 
by  any  foreign  nation.  Not  content  with  the  declaration  of  Great  Britain  that 
it  shall  be  regarded  as  neutral,  not  content  with  treaties  that  may  be  negotiated 
with  foreign  nations  by  which  the  neutrality  of  the  canal  may  be  recognized, 
we  are  preparing,  by  force,  to  protect  our  rights  in  the  Canal  Zone  and  to  that 
great  canal.  But  it  is  said  if  we  grant  discriminating  duties  to  American  ships 
we  are  violating  the  rule  of  equality.  Now,  just  one  moment  on  that  question. 
We  are  spending  $400,000,000  in  the  construction  of  that  canal.  Four  per  cent 
interest  on  that  amount  would  be  $16,000,000  a  year.  We  propose  to  pay, 
according  to  the  estimates  of  these  gentlemen,  from  forty  to  fifty  million  dollars 
a  year  for  its  protection,  maintenance,  and  operation,  and  yet  notwithstanding 
that  vast  expenditure,  to  which  no  foreign  nation  has  contributed  one  penny, 
notwithstanding  the  fact  that  the  canal  is  being  built  on  land  to  which  the 
Government  holds  the  absolute  title,  it  is  solemnly  contended  here  that  under 
the  Hay-Panncefote  treaty  we  have  no  right  to  discriminate  in  favor  of  Ameri- 
can ships  by  granting  them  the  use  of  that  canal  at  a  less  toll  than  we  grant  to 
foreign  ships.  The  proposition  is  wholly  untenable,  to  my  mind.  Gentlemen 
talk  of  the  doctrine  of  equality.  How  could  any  foreign  nation  have  the  courage 
to  make  such  a  claim  in  view  of  these  facts? 

And  yet  thnt  is  the  contention  of  these  gentlemen,  and  they  press  it  with 
great  zeal.  Why  they  should  do  it,  I  do  not  know,  unless  prompted  by  the  con- 
siderations to  which  I  have  already  referred. 

I  do  not  understand  it.  And  the  other  doctrine — that  when  yon  levy  a  toll  it 
does  not  affect  the  price  of  the  commodity  to  the  consumer ;  that  it  will  be  ab- 
sorbed in  the  rate — is  another  specious  contention.  They  would  have  us  believe 
thnt  this  barrier  is  a  blessing  and  that  to  remove  it  is  a  curse,  and  that  it  is  a 
distinct  disadvantage  to  the  American  people  if  we  open  that  waterway  and 
make  it  free  to  our  shipping  between  the  Atlantic  and  Pacific  coasts. 

I  am  quite  willing,  so  far  as  I  am  concerned,  that  our  shipping,  both  in  the 
coastwise  and  foreign  trade,  may  pay  some  amount  of  toll;  that  they  shall 
contribute  toward  the  maintenance  and  operation  of  the  canal,  but  I  do  insist 
thnt  when  these  tolls  are  framed  they  should  distinctly  give  an  advantage  to 
our  American  merchant  shipping.  [Applause.] 

But  to  return  to  the  construction  of  the  Hay-Pauncefote  treaty.    To  learn  the 
terms  of  the  treaty  we  should  refer  to  the  treaty  itself.    Article  2  provides  that 
the  canal  may  be  constructed  under  the  auspices  of  the  Government  of  the 
95272—12090 


68 

United  States,  either  directly  at  is  own  cost  or  by  gift  or  loan  of  money  to 
individuals  or  corporations,  or  through  subscriptions  or  purchase  of  stock  or 
shares,  and  that,  subject  to  the  provisions  of  the  present — the  Hay-Pauncefote, 
not  the  Claytoii-Bulwer — treaty,  the  Government  of  the  United  States  shall  have 
all  the  rights  incident  to  such  construction,  as  well  as  the  exclusive  right  of  pro- 
viding for  the  regulation  and  management  of  the  canal. 

Could  language  be  more  clear  and  free  from  ambiguity  than  this? 

But  it  is  said  that  article  3  of  the  treaty  places  it  beyond  peradventure  of 
doubt  that  in  the  levying  of  tolls  we  must  observe  the  rule  of  equality  as  be- 
tween ourselves  and  other  nations.  To  do  so  by  giving  that  rule  the  interpreta- 
tion contended  for  by  the  gentleman  from  Minnesota,  we  must  have  in  mind 
the  following  considerations:  First,  that  the  canal  is  built  on  American  terri- 
tory, purchased  at  an  expenditure  of  $50,000,000;  second,  the  annual  payment 
to  the  Republic  of  Panama  of  $250,000,  beginning  February  26,  1904 ;  third,  the 
expenditure  of  $400,000,000  in  the  construction  of  the  canal ;  fourth,  the  annual 
expenditure  of  $40,000,000  to  $50,000,000  in  the  defense,  maintenance,  and  opera- 
tion of  the  canal.  But  how  could  other  nations  share  the  benefits  of  the  canal 
with  us  on  terms  of  entire  equality  unless  they  would  come  in  and  share  with 
us  this  great  burden?  [Applause.] 

And  yet,  without  consideration  and  without  assumption  of  any  obligation  on 
their  part  other  than  to  observe  such  conditions  and  charges  of  traffic  as  shall 
be  just  and  equitable,  what  do  we,  in  article  3,  concede  to  other  nations?  First, 
that  "  the  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war 
of  all  nations  on  terms  of  entire  equality,"  so  that  there  shall  be  no  discrimina- 
tion against  any  such  nation,  or  its  citizens  or  subjects,  in  the  conditions  or 
charges  of  traffic,  or  otherwise ;  that  such  conditions  and  charges  of  traffic  shall 
be  reasonable ;  second,  that  the  canal  shall  never  be  blockaded,  nor  shall  any 
right  of  war  be  exercised,  nor  any  act  of  hostility  be  committed  within  it.  And 
yet  these,  with  some  minor  provisions,  are  the  rules  adopted  by  the  United 
States  as  the  basis  of  neutralization  of  the  Panama  Canal,  according  to  the  very 
terms  of  the  treaty,  and  referred  to  as  substantially  embodied  in  the  convention 
of  Constantinople,  signed  on  the  28th  day  of  October,  1888,  for  the  free  naviga- 
tion of  the  Suez  Canal. 

If  it  was  the  intention  of  the  framers  of  the  treaty  that  vessels  of  the  United 
States  should  pay  the  same  tolls  for  use  of  the  canal,  why  did  not  the  framers 
of  the  treaty  say  so  in  unmistakable  language?  Why  provide,  referring  to  for- 
eign nations,  that  the  United  States  should  make  the  conditions  and  charges  of 
traffic  just  and  equitable?  To  my  mind  the  only  answer  is  that  the  right  of  the 
Government  to  fix  the  tolls  for  its  own  shipping  was  so  apparent  and  fully  rec- 
ognized that  the  only  concession  that  could  be  reasonably  insisted  on  was  that 
other  nations  should  be  treated  fairly  and  equitably  in  that  regard. 

Then,  too,  the  British  representative  no  doubt  had  in  mind  the  interpretation 
given  to  the  convention  of  Constantinople  and  the  fact  that  the  Turkish  Govern- 
ment, whose  authority  was  recognized  in  Egypt  at  the  time  the  concession  was 
made  to  De  Lesseps  to  build  the  Suez  Canal,  might  pass  its  vessels  through  the 
canal  free  of  tolls ;  that  the  Russian  Government  pays  the  tolls  of  the  merchant 
steamers  of  the  Russian  volunteer  fleet;  that  the  British  Pacific  &  Orient  Co. 
receives  in  subsidies  nearly  enough  to  pay  all  its  canal  dues;  that  the  North 
German  Lloyd  receives  an  annual  subsidy  on  its  vessels  using  the  canal  of 
$1,385,000 ;  that  Japan  pays  a  subsidy  of  nearly  equal  that  amount  to  the  Nippon 
Yusen  Kaisha  for  its  steamers  using  the  Suez  Canal;  that  Austria-Hungary 
specifically  provides  by  law  for  payment  of  Suez  Canal  tolls  on  Austrian  steam- 
ers from  Trieste  to  Bombay,  Calcutta,  and  Kobe ;  that  subsidies  are  paid  by  the 
French  Government  to  its  largest  company  using  the  canal  amounting  to  about 
$2,500,000  annually. 

In  the  light  of  these  facts  it  could  hardly  be  contended  that  our  Govern- 
ment may  not  remit  all  or  part  of  the  tolls  of  its  vessels  using  the  canal,  and 
it  is  no  cause  for  wronder  that  foreign  nations  are  not  demanding  that  our 
Government  should  charge  the  same  tolls  for  American  ships  as  for  their  own. 

Again,  it  is  contended  by  a  majority  of  the  Committee  on  Interstate  and 
Foreign  Commerce,  led  by  their  able  chairman  in  his  inimitable  and  facetious 
style,  that  if  we  favor  our  shipping  in  the  matter  of  tolls  for  use  of  the  Panama 
Canal  we  will  be  granting  them  subsidies;  something  justly  obnoxious  to  a 
majority  on  this  floor,  if  not  to  the  American  people.  I  have  been  as  much 
opposed  to  subsidies  to  our  merchant  marine  as  the  gentlemen  who  make  this 
95272—12090 


69 

claim.  I  believe  there  is  a  better  way  to  rehabilitate  our  merchant  marine, 
and  as  one  of  the  means  of  doing  so  the  committee  of  which  I  have  the  honor 
to  be  chairman  has  reported  to  the  House  a  bill  for  free  ships  for  the  foreign, 
trade  and  for  free  material,  which  I  hope  will  be  passed  before  this  session 
closes. 

But  if  the  contention  of  the  gentleman  is  correct  the  policy  of  the  Govern- 
ment in  reference  to  our  great  harbor  and  inland  waterways  is  all  wrong. 
******* 

Are  we  not  all  in  favor  of  the  freest  interstate  commerce,  and  should  we 
make  any  distinction  between  that  secured  by  the  improvement  of  our  inland 
waterways  and  the  removal  of  an  obstruction  to  waterway  traffic  between  the 
Atlantic  and  Gulf  States  and  those  of  the  Pacific  Ocean?  And  will  not  the 
Panama  Canal  give  added  value  to  our  inland  waters  as  carriers  of  our  domestic 
and  foreign  commerce?  To  state  the  proposition  is  to  give  the  answer.  And 
yet,  from  this  viewpoint,  it  would  be  quite  as  reasonable  to  charge  American 
vessels  for  the  use  of  our  inland  waterways  and  harbors  as  for  the  passage 
through  the  Panama  Canal,  and  the  failure  to  do  so  in  the  one  instance  is  as 
much  a  subsidy  as  in  the  other. 

Mr.  Chairman,  I  have  not  discussed  what  tolls,  if  any,  should  be  charged 
American  vessels  using  the  canal.  Experience  will  best  solve  that  .question. 
I  have  undertaken  to  combat,  and  I  hope  successfully,  the  contentions  of  the 
majority  of  the  Committee  on  Interstate  and  Foreign  Commerce  that  we  have 
110  right  to  permit  American  vessels  to  use  the  canal  at  a  less  toll  than  that 
charged  foreign  shipping.  I  would  remove  instead  of  adding  to  the  handi- 
cap of  our  merchant  marine. 

I  would  give  to  our  merchant  marine  every  possible  benefit  in  the  use  of 
this  canal,  the  world's  greatest  engineering  triumph,  to  the  end  that  some 
day — and  I  trust  that  day  is  not  far  distant — a  generous  share  of  our  commerce 
in  the  world's  trade  will  be  carried  in  ships  carrying  the  American  flag. 
[Loud  and  prolonged  applause.] 


FROM   SPEECH  OP   HON.   WILLIAM  E.    HUMPHREY,    OF   WASHING- 
TON, IN  THE  HOUSE  OF  REPRESENTATIVES  MAY   17,   1912. 

Mr.  HUMPHREY  of  Washington.  Mr.  Chairman,  this  question  of  the 
Panama  Canal  tolls,  it  seems  to  me,  can  be  stated  in  a  single  sentence:  The 
People  v.  The  Railroads. 

This  is  the  entire  case  of  the  Panama  Canal,  so  far  as  tolls  are  concerned. 
This  is  the  case.  The  court  is  the  American  Congress.  It  is  for  us  to  decide 
this  contest  between  the  people  and  the  railroads.  I  care  not  at  what  angle 
you  may  look  upon  the  question.  I  care  not  in  what  shape  the  arguments  may 
come.  I  care  not  from  what  apparent  source  springs  the  opposition.  I  care 
not  what  reasons  may  be  given  or  what  pretense  may  be  advanced  in  favor  of 
tolls  for  coastwise  ships  through  the  Panama  Canal,  it  all  comes  back  to  this: 
The  People  v.  The  Railroads. 

I  have  never  belonged  to  that  class  of  men  who  have  denounced  corporations 
because  they  were  corporations;  that  have  denounced  great  interests  because 
they  were  great  interests ;  that  have  believed  that  any  great  business  was  evil 
simply  because  it  was  large.  I  have  never  belonged  to  that  class  of  men  who 
seek  every  opportunity  to  stand  upon  the  floor  of  the  House  and  proclaim  that 
they  are  the  friends  of  the  people.  I  have  never  been  one  of  those  who  have 
condemned  and  denounced  the  railroads  of  this  country. 

I  have  never  been  one  of  those  who  have  denounced  those  who  have  con- 
structed and  run  our  railroads.  In  fact,  I  have  always  believed,  and  believe 
now,  that  many  of  the  men  engaged  in  the  building  and  construction  of  rail- 
roads have  been  great  benefactors  of  the  people ;  that  this  country  owes  to  them 
a  debt  of  gratitude.  I  would  not  to-day  injure  the  railroads  in  the  least  de- 
gree. I  believe  that  they  should  be  permitted  to  make  a  legitimate  profit.  I 
believe  that  the  prosperity  of  the  railroads  is  largely  the  prosperity  of  the 
entire  country,  and  that  you  can  not  injure  the  railroads  without  injuring  the 
whole  people  of  this  Nation. 

But  believing  all  this  is  no  reason  why  I  should  not  be  opposed,  as  I  am 
unalterably  opposed,  to  the  railroads  controlling  the  Panama  Canal.  I  believe 
that  we  have  constructed  the  Panama  Canal  primarily  for  the  purpose,  from  a 
95272—12090 


70 

commercial  standpoint,  of  having  competition  between  the  railroads  and  the 
ships  that  shall  run  through  the  canal.  Every  attempt  to  impose  tolls  upon 
the  coastwise  trade  is  an  attempt  to  throttle  this  competition  and  to  that 
extent  benefit  the  railroads. 

Who  has  asked  for  tolls  upon  coastwise  trade?  The  railroads.  Who  has 
appeared  before  the  Committee  on  Interstate  and  Foreign  Commerce  and  asked 
that  tolls  be  placed  upon  our  domestic  trade?  No  one.  What  business  interests 
have  appeared  before  that  committee  opposing  free  tolls?  No  one. 

******* 

Canal  tolls  is  an  effort  to  take  from  the  American  people  the  benefit  of  the 
many  millions  that  we  have  spent  in  the  construction  of  the  canal  and  transfer 
this  benefit  to  the  great  transcontinental  railroads.  The  railroads  of  this  coun- 
try did  everything  within  their  power  to  prevent  the  construction  of  the  canal, 
and  now,  by  the  assistance  of  the  majority  of  the  Interstate  and  Foreign  Com- 
merce Committee,  it  is  proposed  to  turn  over  to  them  the  benefits  of  this  canal 
after  it  has  been  constructed. 

******* 

The  American  people  had  hoped,  and  they  had  a  right  to  hope,  that  the  com- 
pletion of  the  Panama  Canal  would  mean  the  end  of  this  complete  monopoly 
of  transportation,  both  on  land  and  sea,  by  the  railroads.  People  of  this 
country  hoped  that,  at  least  between  the  two  coasts,  we  would  have  competi- 
tion, and  that  at  last  we  would  have  an  opportunity  by  actual  trial  to  see  what 
would  be  the  result  of  competition  between  rail  and  ship.  Such  competition  will 
do  more  than  all  courts  and  commissions  to  regulate  traffic  and  to  produce  a 
fair  and  reasonable  rate  for  shipper  and  consumer.  But  now  it  is  proposed,  at 
the  request  of  the  railroads,  and  of  the  railroads  alone,  so  far  as  the  records 
show  and  so  far  as  the  hearings  show,  to  forget  the  interests  of  the  American 
people  and,  in  violation  of  every  principle  heretofore  followed  by  our  Nation, 
to  protect  the  railroads  of  the  country  by  imposing  a  tax  upon  domestic  traffic, 
which  in  the  last  analysis  is  the  American  public. 

******* 

All  through  the  hearings  upon  page  after  page  is  found  this  line  of  argument 
in  the  form  of  questions  submitted  by  those  who  favor  the  bill  as  reported : 
'•  Will  not  ships,  if  permitted  to  go  through  the  canal  free,  be  able  to  carry 
freight  so  low  that  the  railroads  can  not  compete  with  them?"  The  solicitude 
of  the  majority  of  the  committee  as  shown  by  these  hearings  for  the  railroads 
was  truly  and  touchingly  pathetic.  No  one,  so  far  as  I  know,  has  attempted  to 
show  that  such  competition  would  seriously  injure  the  railroads.  While  Mr. 
James  J.  Hill,  if  he  is  correctly  reported,  has  said,  in  his  opinion,  that  such 
competition  would  not  injure  the  railroads  or  seriously  interfere  with  their 
business,  it  is  my  understanding  that  experts  before  the  committee  testified 
that  not  more  than  10  per  cent  of  the  traffic  carried  by  the  railroads  would  be 
directly  affected  by  vessels  running  through  the  canal.  It  can  not  greatly  injure 
the  railroads  if  we  are  to  believe  the  only  evidence  we  have  upon  the  subject, 
and  if  we  are  to  exercise  common  and  ordinary  judgment,  but  it  might  reduce 
their  earnings. 

This  is  the  foundation  of  the  objection  to  free  tolls,  if  we  have  a  free  canal 
for  coastwise  trade  it  will  take  away  from  the  railroads  just  that  much  of 
their  power  to  arbitrarily  fix  freight  rates.  It  will  tend  to  destroy  their  abso- 
lute monopoly.  It  will  give  us  an  opportunity  for  the  first  Jlme  in  the  history 
of  this  Nation  to  know  what  is  the  result  of  real  competition  between  freight 
carried  by  land  and  water. 

But,  suppose,  for  the  sake  of  the  argument,  that  free  tolls  would  bring  a  ruin- 
ous competition.  Suppose  that  a  large  portion  of  the  traffic  could  be  carried  so 
much  more  cheaply  by  ships  than  the  railroads  that  the  railroads  could  not 
compete.  Would  that  be  a  public  evil?  Is  not  the  public  entitled  to  the  cheapest 
rate  obtainable?  WThat  are  we  building  the  canal  for,  to  reduce  rates  as  much 
as  possible  or  simply  to  reduce  them  to  a  point  where  the  railroads  can  profit- 
ably compete?  When  before  in  the  history  of  this  Nation  has  it  been  proposed 
to  ask  the  assistance  of  Congress  by  way  of  law  to  protect  one  domestic  industry 
from  the  competition  of  another  domestic  industry? 

Many  enlightened  people  of  this  Nation  protest  to-day,  and  always  have  pro- 
tested, against  protecting  by  law  an  American  industry  even  against  the  com- 
petition of  a  foreign  industry.  The  most  radical  protectionist  has  never  gone 
so  far  as  is  now  proposed  by  this  majority  report — to  exercise  the  power  of  the 
Government  to  protect  one  American  industry  from  another  American  industry. 
95272—12090 


71 

As  I  have  said  before,  I  have  never  been  one  of  those  who  have  denounced 
what  is  called  the  "interests,"  but  in  the  10  years  that  I  have  been  a  Member 
of  Congress  the  proposition  that  conies  from  the  committee  to  impose  tolls  upon 
domestic  traffic  passing  through  the  Panama  Canal  is  the  most  indefensible 
and  the  most  shameless  attempt  that  has  ever  been  made  to  turn  over  at  the 
expense  of  the  people  a  great  public  work  for  the  benefit  of  the  private  interests. 

Benefit  of  Tolls. 

Who  will  be  benefited  by  free  tolls  and  who  will  be  injured?  Who  has  ap- 
peared before  the  committee  and  pointed  out,  or  attempted  to  point  out,  that  if 
free  tolls  are  granted  they  will  be  injuriously  affected?  No  one.  It  has  been 
secretly  circulated  about  the  Halls  of  Congress  that  if  free  tolls  are  given 
some  unusual  calamity,  like  the  San  Francisco  earthquake  or  the  sinking  of 
the  Titanic,  will  befall  somebody  and  somewhere.  But  who  and  where  and 
why?  This  awful  foreboding  is  so  appalling  that  no  one  speaks  of  it  except  in 
whispers,  and  none  has  been  so  bold  as  to  commit  to  print  his  thoughts  upon 
the  subject. 

******* 

One  of  the  members  of  the  committee  favoring  the  report  said  in  the  hear- 
ing that  not  one-third  of  the  population  of  the  United  States  would  be  benefited 
by  the  construction  of  the  canal,  yet  considerably  more  than  one-half  of  the 
population  live  within  a  hundred  miles  of  deep-water  transportation.  You 
draw  a  line  south  from  Chicago  to  the  Ohio  River,  thence  west  to  the  Rocks' 
Mountains,  thence  north  to  the  Canadian  boundary  and  you  will  have  practically 
all  of  the  territory  of  the  United  States  where  freight  rates  and  trade  are  not 
directly  and  powerfully  influenced  to-day  by  the  water  and  rail  rates  between 
the  Atlantic  and  the  Pacific  coasts  by  way  of  the  Isthmus.  Approximately 
speaking,  the  rates  to-day  from  the  Pacific  coast  to  the  Atlantic  by  way  of  the 
Isthmus,  and  from  ports  on  the  Atlantic  as  far  west  as  Chicago,  and  from 
ports  on  the  Gulf  to  the  interior  points  and  as  far  north  as  the  Ohio  River, 
are  the  snine  as  direct  rail  rates  from  the  Pacific  to  these  points.  In  other 
words,  it  costs  less  to-day  to  send  a  thousand  feet  of  lumber  from  Seattle  to 
Philadelphia  by  way  of  the  Isthmus  and  from  Philadelphia  back  westward  to 
Indianapolis  than  it  does  to  send  it  directly  by  rail  from  Seattle  to  Indianapolis. 
It  costs  less  to  send  a  ton  of  canned  salmon  from  Seattle  to  New  Orleans  by 
way  of  the  Isthmus  and  from  New  Orleans  northward  approximately  to  the 
Ohio  River  than  it  does  to  send  it  directly  from  Seattle  by  rail  to  these  points. 
It  is  cheaper  to  reach  practically  all  points  in  Texas  and  Oklahoma  by  way  of 
the  Isthmus  than  it  is  directly  by  rail  from  Seattle  to  these  points.  In  some 
instances  rail,  and  water  rates  meet  even  much  farther  west. 

And  what  I  say  as  to  Seattle  applies  to  other  Pacific  coast  points  as  far 
south  as  San  Francisco.  Take  as  an  illustration,  the  rail  and  water  rates 
meet  as  far  west  as  Duluth  on  canned  salmon.  On  soda  ash  the  rate  from 
Hutchinson,  Kans.,  to  the  Pacific  coast  is  the  same  as  the  rate  from  New 
York  to  the  Pacific  coast  by  the  Isthmus.  In  this  case  we  have  the  water 
rate  fixing  the  freight-rate  miles  eastward  from  the  Pacific  coast. 

To  explain  more  fully,  I  will  refer  to  the  map  showing  the  rates  on  two  of 
the  chief  commodities  of  the  Pacific  coast — fir  lumber  and  canned  salmon — 
that  are  shipped  to  the  eastern  portion  of  the  United  States.  I  will  show  the 
various  rates  to  different  points  by  all  rail  and  by  water  and  rail  across  the 
Isthmus  of  Panama  to  Atlantic  and  Gulf  ports,  and  from  these  ports  to  various 
points  in  the  interior.  The  figures  marked  "  R  "  is  the  direct  mail  rate  from  the 
Pacific  coast  to  points  mentioned.  The  figures  marked  "W  &  R  "  is  the  rate 
by  water  and  rail,  by  way  of  the  Isthmus.  The  figures  marked  "  R,  W  £  L" 
is  the  rate  by  way  of  the  Isthmus,  then  by  rail  to  the  Great  Lakes,  and  by 
the  Great  Lakes  to  the  point  mentioned. 

Now,  to  explain  more  fully  what  I  mean,  I  will  illustrate  here  on  the  map,  be- 
cause I  have  heard  a  great  deal  of  argument  to  the  effect  that  only  the  portion 
of  the  country  along  the  coasts  will  be  benefited.  I  am  quoting  from  the  actual 
statements  made  from  the  tariff  rates  on  fir  lumber  and  on  canned  salmon,  the 
most  recent  I  could  get,  which  were  of  December  of  last  year.  Yon  take  lum- 
ber to-day  from  Seattle,  and  it  will  come  down  here  to  the  Isthmus  of  Panama, 
be  transferred  on  the  cars,  and  carried  103  miles  by  rail  across  the  Isthmus, 
come  up  here  to  Philadelphia  by  another  boat,  and  be  carried  back  west  to 
95272—12090 


72 

Pittsburgh  by  the  railroads  for  49  cents  a  hundred,  while  the  direct  rail  rate 
from  Seattle  to  Pittsburgh  is  68  cents  a  hundred. 

Now,  take  another  illustration.  You  take  Concord,  and  you  will  find  that 
the  all-rail  rate  is  75  cents. 

The  water  rate  is  55  cents.  Take  it  as  far  west  as  Cincinnati,  the  all-rail 
rate  is  64  cents.  The  water  rate  is  60  cents. 

******* 

Now,  you  take  canned  salmon,  which  is  one  of  the  big  industries  of  the  Pa- 
cific coast,  amounting  to  $30,000,000  last  year,  and  you  can  send  that  product  to 
New  Orleans  and  up  the  Mississippi  to  St.  Louis  cheaper  than  you  can  ship  it 
direct  by  rail.  A  short  time  ago  a  cargo  of  barley  was  sent  from  the  Pacific 
coast  across  the  Isthmus  and  up  to  New  Orleans  and  up  to  St.  Louis  for  consid- 
erably less  than  the  direct  rail  rate. 

Now,  as  an  extreme  illustration  of  cases  where  you  use  water  again,  you 
take  the  canned  salmon.  It  conies  to  New  York  by  the  water  route  and  goes  up 
to  Buffalo,  and  there  is  again  placed  on  a  vessel  and  goes  out  to  Duluth,  and 
there  practically  meets  the  direct  railroad  rate  from  Seattle  at  that  point. 

Now,  what  becomes  of  your  argument  that  only  the  people  along  the  Pacific 
coast  and  the  Atlantic  coast  and  Gulf  coast  are  benefited  by  the  canal  rates  if 
you  can  to-day  bring  lumber  and  many  other  products  down  to  the  Isthmus  and 
there  transship  them  and  carry  them  103  miles  by  rail  and  place  them  again  in 
ships  and  bring  them  to  Atlantic  and  Gulf  ports  and  then  take  them  back  west 
a  thousand  miles  and  up  north  a  thousand  miles  from  these  ports  as  cheaply  as 
you  can  send  them  direct?  What  becomes  of  the  argument  that  only  the  two 
coasts  of  the  country  are  going  to  be  benefited  by  the  Panama  Canal? 

I  want  to  call  the  attention  of  the  committee  to  this  fact,  that  whenever  you 
reduce  these  rates  along  the  coast,  interior  rates  must  be  reduced.  I  have 
heard  arguments  made  here  upon  the  floor  of  the  House  that  if  we  reduce  the 
rates  to  the  coast  the  railroads  will  probably  increase  the  interior  rates  to  make 
up  their  losses ;  but  this  is  the  first  time  that  I  have  ever  heard  the  argument 
made  that  one  competitor  lowering  his  rates  must  compel  the  other  to  increase 
his.  To  show  you  the  absurdity  of  that  statement,  suppose  that  we  reduced  the 
rates  until  the  rate  from  New  York  as  far  east  as  Spokane  and  over  into  Idaho 
and  Montana,  and  in  all  that  portion  of  the  country,  is  less  than  it  is  from 
Chicago.  Chicago  will  either  reduce  her  rates  or  New  York  will  take  that  mar- 
ket from  her.  We  know  what  Chicago  will  do,  what  she  must  do ;  she  must 
meet  the  New  York  rate  to  the  advantage  of  the  buyer  and  seller. 

Now,  the  argument  has  been  made,  and  admitting  for  the  sake  of  argument 
that  it  is  true,  that  the  east  coast  and  the  west  coast  will  be  more  directly  bene- 
fited by  the  canal,  and  by  the  remission  of  tolls,  than  will  the  interior,  a  propo- 
sition which  I  do  not  admit,  except  for  the  sake  of  argument.  Suppose  it  were 
true.  Can  anyone  demonstrate,  for  instance,  that  the  people  upon  the  Pacific 
coast  are  as  directly  benefited  by  the  Soo  Canal  and  by  the  improvement  of  the 
Great  Lakes  as  the  people  in  that  portion  of  the  country  nearer  the  Lake  ports? 
If  you  are  going  to  adopt  that  argument,  then  wThy  should  not  a  special  rate  be 
placed  upon  shipping  that  goes  through  the  Soo  Canal  ? 

Can  anyone  demonstrate  that  the  many  millions  that  we  have  put  into  the 
Mississippi  River  and  its  tributaries — more  millions  than  we  have  put  into  the 
Panama  Canal,  and  we  are  still  putting  in  other  millons — can  anyone  demon- 
strate that  those  millions  directly  benefit  the  Pacific  coast  and  the  Atlantic 
coast  as  much  as  they  do  the  Mississippi  Valley?  Yet  the  Atlantic  and  the  Pa- 
cific coasts  help  to  pay  for  those  improvements.  If  you  are  going  upon  that  theory, 
why  do  you  not  place  a  charge  upon  the  vessels  that  run  up  and  down  the  Mis- 
sissippi River?  I  exclude  the  Missouri,  because,  in  spite  of  all  the  millions  we 
liave  spent  on  it,  there  are  no  vessels  upon  it. 

Now,  I  want  to  answer  about  the  interior  not  being  benefited  by  the  reduction 
of  rates;  we  know  that  water  and  rail  rates  by  the  Isthmus  are  made  now  as 
far  west  as  Indianapolis  and  as  far  north  as  St.  Louis  in  competition  with  the 
railroads.  If  you  lower  the  water  rate  wrhen  you  go  through  the  Panama  Canal, 
as  must  be  the  case,  then  you  open  up  this  territory  in  the  Middle  West  to  a 
market  they  have  never  had  before.  The  products  from  the  Pacific  coast  will 
then  go  up  into  this  portion  of  the  country,  into  places  where  they  have  never 
been  before;  and  on  the  other  hand  you  take  the  people  who  manufacture  in 
Pittsburgh  and  Cleveland  and  all  that  great  manufacturing  country,  they  can. 
get  their  product  out  to  the  Pacific  coast  for  less  than  they  ever  did  before. 
95272—12090 


73 

Free  tolls  means  free  competition.  It  means  free  commerce.  All  sections  of 
the  country  will  be  benefited  by  the  canal,  and  all  sections  should  bear  the  bur- 
den of  its  construction  and  maintenance. 

When  you  say  that  if  you  reduce  the  freight  rates  on  the  coast  of  the  United 
States  that  the  rates  in  the  interior  will  not  be  reduced,  you  might  just  as  well 
say  that  if  you  reduce  the  level  of  the  water  along  the  edges  of  a  great  lake 
that  the  interior  of  the  lake  will  not  be  reduced.  One  is  to  dispute  the  law  of 
gravitation ;  the  other  is  to  dispute  the  law  of  trade.  So  that  while  trade  will 
continue  between  the  coasts  the  people  in  the  Middle  West  will  get  lower  rates 
and  new  markets. 

******* 

Many  times  in  this  report  in  sophomorical  language  the  majority  cries  out 
that  to  give  free  tolls  would  be  an  unjust  discrimination  and  a  great  injustice  to 
90  per  cent  of  our  coastwise  vessels  that  now  run  up  and  down  our  coasts  but 
will  not  use  the  canal.  Listen  how  anxious  and  solicitous  they  are  about  the 
railroad-owned  ships  in  the  coastwise  trade: 

Ninety  per  cent  of  the  coastwise  ships,  busy  all  the  time  In  interstate  business,  will 
never  approach  the  canal  at  all.  Less  than  10  per  cent  of  all  these  coastwise  ships  will 
use  the  canal,  making  long  journeys,  charging  correspondingly  more  freight  and  passenger 
rates,  and  making  infinitely  more  money,  yet  it  is  selfishly  demanded  that  those  few 
ships — for  only  a  few  will  be  needed — shall  be  given  their  tolls  in  the  interests  of  inter- 
state trade,  while  the  90  per  cent  rendering  service  just  as  valuable  in  interstate  com- 
merce would  not  participate  in  the  contribution. 

If  the  argument  of  the  majority  be  true,  all  the  coastwise  vessels  are  now 
participating  in  a  subsidy.  Every  coastwise  vessel  receives  a  subsidy  when  it 
runs  into  one  of  our  subsidized  harbors.  Why  should  not  a  coastwise  ship  stop 
and  pay  tolls  to  reimburse  the  Government  for  improving  the  harbors  it  uses? 
If  remission  of  tolls  is  a  subsidy,  then  every  vessel  that  goes  through  the  Soo 
Canal  receives  a  subsidy.  Why  should  these  vessels  not  stop  and  remit  to  the 
Government  the  money  it  has  expended  to  construct  this  canal?  Why  should 
this  canal  be  free  and  the  Panama  Canal  charge  tolls?  We  have  subsidized 
the  Mississippi  River  and  its  tributaries  in  a  greater  amount  than  we  will 
expend  for  the  construction  of  the  Panama  Canal.  And  all  these  many  mil- 
lions have  been  expended  for  politics  more  than  for  the  benefit  of  navigation. 

If  remission  of  tolls  is  a  subsidy,  then  every  vessel  running  on  our  interior 
rivers  is  receiving  a  subsidy.  Why  does  not  some  subsidy  hater,  some  railroad 
despiser,  some  special-privilege  denouncer,  some  self-proclaimed  protector  of 
the  people  rise  and  exercise  his  privileges  and  his  vocabulary  in  demanding 
that  the  Government  be  repaid  this  vast  subsidy  that  is  given  to  the  90  per 
cent  of  the  American  vessels  now  running  in  our  coastwise  trade  and  upon 
our  lakes  and  rivers? 

******* 

Every  charge  that  is  made  on  an  American  vessel  in  the  coastwise  trade  pass- 
ing through  the  canal,  whether  that  charge  be  great  or  small,  will  eventually 
show  itself  in  the  freight  rate  and  will  eventually  be  paid  by  the  American 
people.  The  amount  of  the  charge  will  make  no  difference  in  the  certainty  and 
the  sureness  of  the  result.  With  a  mind  that  deceives  itself  with  the  delusion 
that  a  tax,  however  small,  is  not  a  burden  upon  commerce  and  eventually  borne 
by  the  people  it  is  useless  to  argue.  It  is  worse  than  a  waste  of  words  to 
attempt  to  convince  anyone  who  holds  such  views,  for  such  mind  is  beyond 
improvement  and  has  absorbed  more  than  earthly  wisdom. 

******* 

I  close  this  argument  as  I  began.  This  is  the  case  of  the  People  v.  The  Rail- 
roads. Never  since  I  have  been  a  Member  of  Congress  has  there  been  such  a 
transparent  and  indefensible  attempt  to  legislate  in  behalf  of  any  great  private 
interest,  without  regard  to  the  public  welfare,  as  has  been  displayed  in  the  bill 
that  has  been  reported  to  the  House  proposing  that  in  the  use  of  the  Panama 
Canal  ships  flying  the  American  flag  shall  be  taxed  the  same  as  those  flying 
a  foreign  flag.  Shall  we  have  competition  between  the  steamship  lines  running 
between  the  two  coasts  and  the  transcontinental  railroads?  Shall  our  com- 
merce be  increased  and  our  freight  rates  lowered?  Shall  we  have  dug  the  canal 
for  the  benefit  of  the  American  people  who  have  paid  for  it  and  own  it  and 
must  protect  it,  or  shall  we  have  expended  all  these  millions  for  the  benefit  of 
other  nations  and  for  the  benefit  of  the  railroads?  This  is  the  question  that 
we  must  answer  to  the  American  people  by  our  votes  upon  this  bill.  |  Ap- 
plause.] 

05272—12000 


74 

FROM  SPEECH  OF  HON.  WILLIAM  O.  BRADLEY,  OF  KENTUCKY,  IN 

THE  SENATE  OF  THE  UNITED  STATES  JULY  29,  1912. 

Mr.  BRADLEY.  Mr.  President,  I  deny  that  the  people  of  the  United  States 
have  known  all  the  time  or  know  now  that  our  Government  has  no  right  to 
extend  any  privileges  to  our  commerce  which  goes  through  this  canal.  Had 
the  people  of  the  United  States  thought  that  such  would  be  the  result,  the  canal 
would  never  have  been  constructed.  They  never  would  have  been  willing  to 
expend  $400,000,000  to  build  a  canal  for  the  joint  use  of  all  the  nations  of  the 
earth  in  which  they  had  no  superior  right. 

I  affirm  as  the  first  proposition  that  under  the  treaty  now  in  force  the  Gov- 
ernment of  the  United  States  has  the  right  to  give  preference  to  its  own  com- 
merce as  well  as  its  battleships. 

In  the  second  place,  I  affirm  that  if  this  be  not  true  and  if  the  treaty  is  to 
be  given  the  strict  construction  contended  for  by  those  who  oppose  us,  that 
the  treaty  is  an  absolute  nullity,  because  by  its  terms  we  have  endangered  the 
very  life  of  our  own  country. 

In  the  third  place,  I  affirm  that  the  United  States  having  become  the  owner 
of  this  territory,  having  become  the  sovereign  therein,  for  \vhich  right  they  have 
paid,  the  United  States  having  bought  all  the  rights  and  property  of  the  New 
Panama  Canal  Co.,  for  which  it  has  paid,  not  only  the  canal  but  the  land 
which  adjoins  it  is  the  absolute  property  of  the  United  States,  as  much  so  as 
is  Alaska,  as  much  so  as  is  the  District  of  Columbia;  and  that  any  question 
which  may  arise  in  regard  to  these  matters  is  not  subject  to  arbitration,  because 
it  is  a  domestic  question,  and  the  United  States  never  has  submitted  and  never 
will  submit  the  decision  of  a  domestic  question  to  any  court  of  this  earth. 

In  the  fourth  place,  our  only  duty  as  to  the  nations  of  the  world — aside  from 
our  own — is  to  give  them  perfect  equality  in  the  use  of  the  canal,  to  preserve 
strict  neutrality  as  between  them  in  case  of  war,  and  to  charge  them  no  more 
than  just  and  equitable  tolls. 

In  the  fifth  place,  now  that  the  United  States  has  become  the  sovereign  of 
the  country  through  which  the  canal  passes,  our  right  to  control  it  is  purely 
a  domestic  right,  and  any  question  affecting  the  same  is  not  the  subject  of  arbi- 
tration by  The  Hague  or  any  other  tribunal,  but  must  of  right  be  settled  by 
ourselves.  That  the  changed  conditions  render  the  treaty  voidable  whatever 
may  be  its  construction. 

******* 

What  was  the  object  of  the  new  treaty?  I  have  very  serious  doubt  in  view 
of  the  changed  conditions,  the  United  States  building  the  canal  herself  with 
her  own  money,  whether  she  did  not  have  a  right  to  do  so  whether  the  Clayton- 
Bulwer  treaty  was  abrogated  or  not,  because  under  that  treaty  England  as  an 
independent  nation  had  no  right,  in  view  of  the  Monroe  doctrine,  to  construct 
the  canal.  She  never  had  that  right,  and  she  has  no  such  right  to-day.  There- 
fore she  conceded  nothing  in  agreeing  to  the  new  treaty.  Under  that  treaty 
Great  Britain  expends  nothing  and  incurs  no  resposibility.  What  is  the  respon- 
sibility of  Great  Britain  under  the  present  treaty?  She  does  not  even  agree 
to  stand  by  the  United  States,  as  she  agreed  to  do  under  the  Clayton-Bulwer 
treaty,  as  to  the  persons  or  company  which  should  construct  the  canal.  Her 
responsibility  under  the  treaty  of  1850  was  to  guarantee  protection  to  the  per- 
sons or  company  building  the  canal.  This  she  does  not  undertake  under  the 
new  treaty.  Why?  Because  the  United  States  did  not  ask  her  to  do  so,  and 
did  not  desire  her  to  do  so.  The  United  States  felt  that  she  was  able  to  attend 
to  her  own  business,  take  charge  of  her  own  property,  and  while  constructing 
the  canal  to  protect  herself  without  assistance. 

Mr.  CUMMINS.     Mr.  President — 

The  PRESIDENT  pro  tempore.  Does  the  Senator  from  Kentucky  yield  to  the 
Senator  from  Iowa? 

Mr.  BRADLEY.     With  pleasure. 

Mr.  CUMMINS.  Let  me  suggest  at  this  point — I  know  the  Senator  from  Ken- 
tucky will  emphasize  it  during  the  course  of  his  remarks— that  the  only  agreement 
or  obligation  entered  into  by  Great  Britain  in  the  Hay-Pauncefote  treaty  was 
the  agreement  that  the  Clayton-Bulwer  treaty  might  be  abrogated  and  the 
new  treaty  should  supersede  it.  That  is  the  only  promise  or  obligation  con- 
tained in  the  Hay-Pauncefote  treaty  so  far  as  Great  Britain  is  concerned. 

Mr.  BRADLEY.     I  thank  the  Senator  for  his  suggestion,  and  quite  agree  with 
him  in  what  he  has  said. 
95272—12090 


75 

As  I  have  said,  Great  Britain  has  not  furnished  a  dollar  to  build  the  Panama 
Canal.  It  is  a  matter  entirely  in  the  hands  of  the  United  States;  but,  now 
when  the  canal  has  been  about  completed,  we  are  told  that  Great  Britain  ob- 
jects to  the  United  States  managing  her  own  canal,  which  she  has  built  and 
paid  for  with  her  own  money,  and  objects  to  us  giving  our  vessels  any  prefer- 
ence. Great  Britain  desires  to  be  put  on  the  ground  floor  with  us.  She  desires 
to  get  the  benefits  of  the  canal  without  paying  for  them.  She  is  like  an  old 
man  of  whom  I  once  heard.  He  imagined  that  he  was  a  philanthropist,  find 
he  provided  in  his  will  that  upon  his  death  his  herd  of  cattle  should  be 
slaughtered  and  the  product  sold  to  the  highest  bidder,  but,  considering  his 
wonderful  sympathy  for  the  poor,  he  provided  that  the  horns,  hoofs,  and  tails 
should  be  divided  equally  among  the  poor.  [Laughter.]  That  is  a  fair  illus- 
tration of  the  liberality  of  Great  Britain,  which  comes  here  after  we  have  built 
the  canal  and  asks  us  now  to  allow  that  country  every  privilege  which  we  have 
ourselves. 

******* 

In  the  present  treaty  Great  Britain  does  not  participate  in  the  adoption  of 
the  rules  for  the  administration  of  the  canal ;  but  the  United  States  alone 
adopts  the  rules,  showing  that  it  was  clearly  considered  between  the  two 
countries  that  the  United  States,  being  the  builder  of  the  canal,  was  conceded 
the  right  to  prescribe  the  rules,  and  that  Great  Britain  had  nothing  to  do  with 
the  matter.  As  to  the  enforcement  of  the  rules,  Great  Britain  is  not  to-day 
bound  under  any  of  the  terms  of  the  treaty.  In  the  last  instance  the  concession 
to  Great  Britain  allowing  her  participation  was  merely  a  matter  of  gratuity 
on  the  part  of  the  United  States  in  carrying  out  the  original  intention  that 
the  canal  should  be  neutral. 

What  is  meant  by  neutrality  except  that  the  canal  shall  be  neutral  territory 
as  to  all  nations  of  the  earth  except  the  United  States?  If  Great  Britain 
and  Japan  should  go  to  war,  then  the  United  States  could  prohibit  either  of 
them  taking  advantage  of  the  canal  in  any  way.  She  could  prohibit  any  nation 
on  earth  from  doing  so  as  against  a  belligerant;  but  at  the  same  time  she  does 
not  estop  herself  from  the  right  of  self-protection.  By  failing  to  insist  on  a 
provision  allowing  her  participation  in  the  making  of  rules  for  the  canal 
Great  Britain  conceded  that  the  United  Staes  alone  had  the  right  to  make 
the  rules.  The  United  States  alone  having  adopted  the  rules,  it  could  not  be 
considered  for  a  moment  that  she  included  herself  in  the  term  "  all  other 
nations."  It  is  perfectly  plain  that  she  did  not  include  herself,  and  that  the 
rules  which  were  adopted  by  her  for  the  nations  at  large  do  not  apply  to  her, 
because  there  is  nothing  to  indicate  anything  of  the  kind. 

You  will  find  that  there  is  another  change  in  the  last  treaty.  In  the  first 
treaty  there  was  nothing  specifically  binding  on  the  United  States  or  any  other 
country  as  to  tolls.  Now,  bearing  in  mind  that  the  Government  of  the  United 
States  is  the  owner  and  the  proprietor  of  the  Panama  Canal,  and  that  she 
was  to  build  it,  a  provision  was  inserted  in  the  Hay-Pauncefote  treaty  that  the 
United  States  will  not  collect  unjust  or  unreasonable  tolls.  That  was  not  in 
the  first  treaty,  because  in  the  first  treaty  it  was  provided  that  the  traffic 
should  be  open  and  equal  to  the  world ;  but  now  that  the  position  of  the  United 
States  is  fully  understood  and  admitted,  she  agrees,  so  far  as  tolls  are  con- 
cerned as  to  the  commerce  of  other  nations,  they  shall  be  just  and  equitable. 

Mr.  President,  I  call  attention  to  the  further  fact  that  in  the  first  Hay- 
Pauncefote  treaty,  while  the  Unied  Sates  was  given  the  exclusive  right  of  pro- 
viding for  the  regulation  and  management  of  the  canal,  its  control  was  subject 
to  the  rules  then  adopted  by  both  countries.  In  the  present  treaty  the  United 
States  is  given  exclusive  right,  without  any  agreement  as  to  rules  provided  or 
to  be  promulgated  by  the  two  contracting  parties,  but  with  the  sole  provision 
that  there  shall  be  entire  equality  of  treatment  for  all  nations  and  that  the 
charges  of  traffic  shall  be  just  and  equitable. 

I  refer  to  these  matters  to  show  what  view  Great  Britain  and  the  United 
States  took,  at  the  time  the  treaty  was  written,  of  the  provision  as  to  tolls.  It  is 
a  mere  concession  by  the  United  States,  which  stands  as  the  mistress  of  the 
situation.  In  view  of  these  changes,  the  exception  added  to  the  first  treaty  was 
omitted  and  was  no  longer  necessary,  for  the  United  States  reserved  the^ right 
of  self -protect!  on  in  case  of  war. 

It  is  perfectly  plain  that  Great  Britain  recognized  the  justice  of  this  change. 
It  can  not  be  contended  that  her  diplomats  were  ignorant  of  changed  conditions. 
So  the  agreement  was  made  that  the  United  States  was  to  have  exclusive  right 
95272—12090 


76 

to  provide  for  the  regulation  and  management  of  the  canal.  Stripped  of  former 
conditions,  the  United  States  had,  first,  the  right  to  direct,  order,  rule,  and 
govern,  because  all  those  terms  are  synonymous  with  the  term  used,  which  is 
to  "  regulate."  She  had  the  right  to  direct,  govern,  control,  order,  and  conduct, 
for  each  of  those  words  is  synonymous  with  the  word  "  manage,"  and  those  two 
words  "  manage  "  and  "  regulate  "  are  the  words  employed  in  the  present  treaty 
as  showing  the  absolute  right  of  the  United  States. 

I  must  be  pardoned  for  being  a  little  tiresome  when  I  call  attention  again, 
to  the  fact  that  under  the  rules  jointly  agreed  to  between  the  two  countries  in 
the  first  Hay-Pauncefote  treaty  they  were  to  govern  the  canal.  In  every  con- 
tract there  must  be  two  parties,  and  those  two  parties  must  agree  on  something. 
This  treaty  is  nothing  in  one  sense  of  the  wTord  but  a  contract — a  contract  be- 
tween nations — and,  so  far  as  the  present  rules  are  concerned,  Great  Britain 
does  not  even  agree  that  they  shall  be  adopted,  but  the  United  States,  on  her 
own  motion,  adopts  the  rules  and  makes  them  the  basis  of  operating  the  canal. 

What  is  the  expressed  reason  for  this  treaty?  In  the  present  treaty  the  ex- 
pressed reason  is  that  the  parties  are  desirous  of  facilitating  the  construction 
of  the  canal  without  impairing  the  general  principle  of  neutralization  established 
in  article  8  of  the  Clayton-Bulwer  treaty.  What  is  meant  by  "  neutralization  "? 
That  the  United  States,  having  now  become  the  controller  of  the  situation, 
guarantees  neutrality,  so  far  as  she  is  concerned,  between  and  among  all  the 
nations  of  the  earth,  always  reserving  her  own  right  of  self-protection. 

It  has  been  said  that  honor  requires  that  we  shall  accede  to  the  views  of 
Great  Britain.  No  Member  of  the  Senate  holds  in  higher  estimation  the 
honor  of  his  country  than  do  I,  and  I  will  add  that  no  Member  of  the  Senate 
holds  higher  in  estimation  the  protection  and  life  of  his  own  country  than  do  I ; 
but  I  affirm  that  no  nation  is  bound,  in  honor  or  otherwise,  to  destroy  herself 
by  any  treaty,  even  if  the  construction  contended  for  by  those  who  do  not 
agree  with  me  is  correct. 

The  first  proposition,  if  we  are  to  adopt  the  construction  contended  for,  is 
that— 

The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations — • 
Including  the  United  States — 

observing  these  rules,  on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimination 
against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions  or  charges 
of  traffic  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be  just  and  equitable. 

If  we  are  bound  by  that,  we  have  no  right  in  case  of  war  to  give  ourselves  any 
advantage.  But  that  is  not  the  worst  part  of  this  treaty  by  which  it  is  said 
we  are  bound.  Let  us  go  a  little  further : 

The  canal  shall  never  be  blockaded,  nor  shall  any  right  of  war  be  exercised  nor  any 
act  of  hostility  be  committed  within  it.  The  United  States,  however,  shall  be  at  liberty 
to  maintain  such  military  police  along  the  canal  as  may  be  necessary  to  protect  it  against 
lawlessness  and  disorder. 

What  does  this  mean?  We  must  take  it  at  its  face  value,  for  we  are  told 
that  we  are  governed  by  this  instrument  as  by  bands  of  iron.  What  does  it 
mean?  That  the  canal  shall  never  be  blockaded,  though  it  may  be  necessary 
for  us  to  blockade  it  for  our  own  self-defense.  No  right  of  war  shall  be  ex- 
ercised. We  have  no  right  to  take  a  battleship  through  that  canal  in  case  of 
war  against  us  in  order  to  protect  ourselves,  nor  have  we  any  right  to  prevent 
a  battleship  from  passing  through  the  canal  to  attack  us;  nor  have  we  any  right 
to  unload  munitions  of  war  in  the  Canal  Zone.  We  can  not  embark  or  disem- 
bark troops  if  we  should  become  involved  in  war  with  another  nation.  We  can 
not  stop  a  moment  in  the  canal,  except  in  case  of  an  accidental  hindrance  of 
transit,  and  then  the  vessel  must  resume  its  voyage  with  the  utmost  dispatch. 
WThat  else?  The  provisions  of  this  article  shall  apply  to  whom?  It  applies  to 
all  belligerents.  It  applies  to  us  as  well  as  everybody  else.  No  vessel  shall 
remain  within  3  marine  miles  of  the  canal  longer  than  24  hours.  We  can  not 
allow  our  own  battleships  to  remain  in  these  waters  longer  than  24  hours. 
What  else? 

Vessels  of  war  of  a  belligerent  shall  not  remain  in  such  waters  longer  than  24  hours 
at  any  one  time,  except  in  case  of  distress,  and  in  such  case  shall  depart  as  soon  as 
possible  ;  but  a  vessel  of  war  of  one  belligerent  shall  not  depart  within  24  hours  from 
the  departure  of  a  vessel  of  war  of  the  other  belligerent. 

If  we  were  involved  in  war  to-morrow,  this  canal  completed,  and  our  ships 
were  there  for  the  purpose  of  protecting  us  from  the  invasion  of  a  foregin  foe, 
05272—12090 


77 

and  some  ship  of  such  a  foe  should  come  within  3  marine  miles  of  the  canal,  we 
would  have  to  wait  24  hours  before  we  could  pursue  it.  In  other  words, 
we  would  be  compelled  to  allow  it  to  escape,  although  it  intended  to  inflict  or 
had  inflicted  injury  on  our  commerce  or  our  possessions,  because  we  must  stand 
still  24  hours.  O  Senators,  Senators,  what  a  ridiculous  construction !  What  a 
comment  upon  our  manhood  and  intelligence  that  we  have  given  away  our 
birthright,  our  freedom,  and  our  safety  for  less  than  a  mess  of  pottage,  and  that 
we  must  go  hat  in  hand  to  Great  Britain  and  on  bended  knee  ask  her  to  agree 
that  we  may  attend  to  our  own  business  under  our  own  flag. 

******* 

What  is  the  condition  of  the  Panama  Canal  to-day?  Let  me  read  so  much 
of  the  language  of  the  treaty  with  Panama  as  I  think  is  necessary  to  this 
discussion. 

The  Republic  of  Panama  grants  to  the  United  States  all  the  rights,  power,  and  au- 
thority within  the  zone  mentioned  and  described  *  *  *  which  the  United  States 
would  possess  and  exercise  if  it  were  the  sovereign  of  the  territory  *  *  *  to  the 
entire  exclusion  of  the  exercise  by  the  Republic  of  Panama  of  any  such  sovereign  rights, 
power,  or  authority. 

Now,  the  United  States  is  the  sovereign  in  Panama,  having  paid  $10,000,000 
therefor;  just  as  much  the  sovereign  there  as  she  is  in  the  District  of  Columbia. 
Suppose  a  question  would  arise  here  about  something  that  was  to  be  done  in 
the  District  of  Columbia.  What  Senator  would  be  bold  enough  to  contend  that 
we  should  arbitrate  that  matter  at  The  Hague  tribunal?  What  has  The  Hague 
tribunal  to  do  with  our  domestic  affairs?  This  is  an  affair  of  our  own.  It  is  a 
right  which  we  possess  under  these  treaties  and  under  the  laws  of  our  country, 
and  it  is  a  right  that  we  propose  to  exercise,  and  not  to  ask  any  nation  for  its 
consent;  nor  do  I  believe  there  will  be  any  trouble  growing  out  of  our  actions. 
England  is  too  wise  and,  in  my  opinion,  too  just  to  raise  any  disturbance  with- 
out the  slightest  reason  to  sustain  her  contention.  I  am  satisfied  that  this 
whole  controversy  will  be  adjusted  at  last  by  a  proper  diplomacy  and  not  by 
turning  ourselves  over  to  The  Hague  tribunal,  to  a  court  necessarily  constituted 
of  the  certain  nations  of  the  earth,  which  nations  have  an  interest  directly 
opposed  to  ours,  and  in  which  we  could  not  have  the  slightest  hope  for  justice. 
******* 

We  seek  no  trouble.  Neither  do  we  retreat  from  it.  We  only  propose  to 
protect  our  own  territory  and  our  own  rights.  This  country  has  never  failed  to 
protect  both.  Our  fathers  did  not  fail  and  their  sons  will  not  fail.  The  spirit 
of  American  liberty  and  American  manhood  exists  to-day  as  it  existed  in 
seventy-six,  in  1812,  and  during  the  War  with  Spain.  That  spirit  has  lived 
through  all  these  years,  and  will  continue  to  live  as  long  as  our  Government 
shall  stand.  And  by  that  spirit,  coupled  with  the  intelligence  and  sense  of 
justice  of  our  own  people,  shall  this  and  all  other  questions  of  a  similar  char- 
acter affecting  the  well-being  of  this  country  be  decided.  The  United  Stales 
has  never  submitted  and  will  never  submit  to  any  other  nation  or  court  of  arbi- 
tration any  question  affecting  the  authority  to  govern  itself  or  to  control  its 
domestic  institutions. 


FROM  SPEECH  OF  HON.   HORACE  M.   TOWNER,   OF  IOWA,   IN  THE 
HOUSE   OF  REPRESENTATIVES   MAY    17,    1912. 

Mr.  TOWNER.  Mr.  Chairman,  I  congratulate  the  committee  on  the  wisdom 
and  fur-sighted  statesmanship  shown  in  most  of  the  provisions  of  the  bill  sub- 
mitted. It  is  because  I  so  greatly  appreciate  and  admire  the  act  as  a  whole 
that  I  regret  that  I  can  not  assent  to  all  its  terms.  I  am  compelled  to  differ 
from  the  committee  as  to  some  of  the  provisions  of  the  bill,  but  such  changes 
being  adopted  as  I  believe  the  House  must  after  consideration  deem  wise,  I 
hope  the  bill  will  pass  and  become  a  law.  I  am  confident  that  if  it  does  it  will 
be  considered  as  not  only  one  of  the  most  important  measures  adopted  by  the 
present  Congress,  but  one  of  the  great  acts  of  constructive  statesmanship  of  the 
century,  worthy  as  a  piece  of  statecraft  to  rank  with  the  completion  of  the  canal 
as  a  physical  and  engineering  accomplishment,  to  the  lasting  credit  and  honor 
of  American  enterprise  and  statesmanship.  [Applause.] 

******* 

95272—12090 


78 

Now  I  come  to  article  3  of  the  Hay-Pauncefote  treaty,  which  provides : 

The  United  States  adopts,  as  to  the  basis  of  the  neutralization  of  such  ship  canal,  the 
fohosving  rules,  substantially  as  embodied  in  the  convention  of  Constantinople,  signed  the 
28th  October,  1888,  for  the  free  navigation  of  the  Suez  Canal,  that  is  to  say  : 

1.  The  canal  shall  be  free  and  open  t9  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  these  rules,  on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimina- 
tion against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions  or 
charges  of  traffic  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be  just  and 
equitable. 

I  would  like  just  here  to  call  attention  to  this  distinction,  which  seems  in  the 
minds  of  some  gentlemen  not  very  plain  or  clear.  We  were  not  only  negotiating 
a  treaty  with  Great  Britain,  but  we  were  entering  upon  an  obligation  through 
her  with  all  the  other  nations  of  the  world  that  might  come  under  the  terms  of 
this  treaty,  and  any  nation  that  desires  to  use  this  canal  must  come  under  the 
terms  of  this  treaty  in  order  to  do  so ;  and  so  in  effect  this  treaty  that  we  thus 
made  was  a  treaty  between  the  United  States,  building  the  canal,  and  the  other 
nations  of  the  world  who  were  to  use  it. 

Now,  having  stated  the  things  that  the  United  States  might  do  with  regard 
to  the  canal,  it  states  the  things  that  the  United  States  promises  to  do,  and  how 
the  United  States  will  treat  other  nations. 

The  United  States  can  not  give  a  privilege  to  England  that  it  would  not  grant 
to  Germany.  It  can  not  treat  the  South  American  countries  in  a  more  favorable 
way  than  it  does  the  European  countries,  although  many  of  us  would  like  to  do 
so.  It  must  treat  them  all  upon  terms  of  equality. 

I  appeal  to  gentlemen  recognizing  the  situation  as  it  was,  is  it  not  a  strained 
construction  to  put  upon  this  treaty  to  say  that  after  having  said  the  United 
States  will  build  it,  pay  for  it,  put  it  in  operation,  place  it  upon  her  own  pur- 
chased territory,  fortify  it,  govern  it,  control  it,  regulate  it  through  all  the  years 
to  come,  that  it  should  have  all  these  powers,  and  then,  when  it  says  with  regard 
to  the  other  nations  of  the  world  that  they  shall  not  be  discriminated  against, 
that  they  shall  be  treated  upon  terms  of  equality,  that  such  language  means 
that  the  United  States  shall  not  use  it  for  her  own  people  and  her  own  purposes 
as  she  may  choose?  [Applause.] 

Such  conditions  and  charges  of  traffic  shall  be  just  and  equitable.  The 
United  States  can  not  demand  unreasonable  tolls  from  England  or  from  Ger- 
many or  from  any  other  nation.  The  tolls  that  she  fixes  must  be  reasonable 
and  they  must  be  equitable.  Under  this  provision  what  does  the  United  States 
undertake  to  do?  It  must  keep  the  canal  open  to  all  nations.  It  can  not  allow 
the  vessels  of  commerce  or  of  war  of  one  nation  to  use  it  and  refuse  its  use 
to  another.  It  can  not  give  special  privileges  to  France  and  refuse  them  to 
Russia.  It  is  apparent  the  language  of  the  provision  has  reference  to  the 
manner  in  which  we  shall  treat  foreign  nations  and  does  not  apply  to  our 
domestic  concerns.  It  refers  to  ships  of  other  nations  and  not  to  our  own. 

Secretary  Hay,  in  his  memorandum  to  the  Senate  following  the  negotiation 
of  the  treaty  and  contrasting  its  terms  with  those  of  former  treaties,  said : 

The  whole  theory  of  the  treaty  is  that  the  canal  is  to  be  an  American  canal.  The 
enormous  cost  of  constructing  it  is  to  be  borne  by  the  United  States  alone.  When  con- 
structed it  is  to  be  exclusively  the  property  of  the  United  States,  and  to  be  managed, 
controlled,  and  defended  by  it. 

We  never  had  any  such  treaty  as  that  before.  The  previous  treaty  was  not 
such  a  treaty.  We  never  entered  before  into  an  agreement  by  which  we  agreed 
to  build  the  canal  and  pay  for  it,  by  which  we  agreed  that  we  should  be  respon- 
sible for  it,  and  maintain  and  govern  and  keep  it  free  to  the  nations  of  the 
world  forever;  and  therefore  the  restrictions  of  former  treaties  can  not  bind 
us  now. 

******  * 

Mr.  BOWTMAN.  I  should  like  to  get  clearly  in  my  mind  the  gentleman's 
idea  with  relation  to  the  situation  regarding  the  canal.  Is  it  not  this:  Just 
as  a  railroad  might  have  the  right  when  building  its  line  to  carry  material  in 
connection  with  the  construction  or  might  transport  its  own  employees  and 
officers  without  charging  them  anything,  and  yet  be  obliged  to  give  rates  wrhich 
would  not  discriminate  against  anyone  outside. 

Mr.  TOWNBIl.  The  gentleman's  illustration  is  exceedingly  happy.  It  would 
be  a  singular  condition  that  would  exist  if  the  United  States  should  persist  in 
this  attempted  policy — the  other  nations  of  the  world  paying  the  tolls  of  their 
ships  using  the  canal  and  the  United  States,  which  built  and  owns  it,  demanding 
tolls  from  its  own  vessels. 
95272—12090 


79 

It  would  probably  be  better  in  form,  and  save  any  possible  protest,  that  tolls 
from  American  vessels  engaged  in  foreign  commerce  should  be  collected  in 
the  first  instance;  but  these  may  be  and  should  be  refunded.  To  so  refund  the 
tolls  paid  would  be  purely  a  question  of  domestic  policy  and  would  not  be  in 
contravention  of  our  treaty  obligations. 

******* 

President  Taft  has  well  said,  "  We  built  the  canal  as  part  of  our  coast  line." 
Our  laws  now  provide  (R.  S.,  4220;  Navigation  Laws,  sec.  158)  that — 

No  vessel  belonging  to  any  citizen  of  the  United  States  trading  from  one  port  v/ithin 
the  United  States  shall  be  subject  to  tonnage,  tax,  or  duty,  if  such  vessel  be  licensed, 
registered,  or  enrolled. 

That  has  been  the  settled  policy  of  the  country  for  years,  and  the  proposition 
contained  in  this  bill  to  reverse  this  policy  and  to  charge  American  ships  en- 
gaged in  interstate  trade  tolls  for  the  use  of  an  American  canal  built  by  the 
American  people  on  American  soil  is  un-American  and  abhorrent.  Fortunately, 
the  question  as  a  question  of  law  has  been  settled  by  the  Supreme  Court  of  the 
United  States. 

In  Olseii  v.  Smith  (195  U.  S.,  332)  our  Supreme  Court  passed  upon  this  treaty 
provision — 

******* 

I  was  somewhat  amused  by  the  ingenious  argument  of  the  gentleman  from 
Minnesota  this  afternoon.  He  said  it  is  true  the  Supreme  Court  in  that  case 
had  decided  against  the  treaty  regulating  our  coastwise  commerce,  but  did  so 
upon  the  grounds  that  such  action  was  only  a  determination  of  different  classi- 
fications. An  examination  of  the  case  will  show  that  the  question  of  classifica- 
tion had  nothing  to  do  with  the  pivotal  point  determined,  which  was  that  it  was 
nor  ii  matter  of  concern  to  Great  Britain  what  charges  were  made  or  conditions 
imposed  in  regard  to'our  coastwise  trade.  We  could  do  as  we  pleased  with  it, 
since  they  were  prevented  from  entering  upon  it ;  and  the  decision  iii  that  case 
is  an  absolute  determination  by  our  own  Supreme  Court  that  no  matter  what 
may  be  the  provisions  of  a  treaty  with  relation  to  our  foreign  trade,  it  could 
not  be  applied  to  our  coastwise  and  domestic  trade,  because  the  regulation  of 
such  trade  could  not  be  within  the  contemplation  of  the  parties,  since  one  of 
them  could  not  under  any  circumstances  enter  it. 

In  that  case  it  was  accordingly  held  that  the  State  law  exempting  coastwise 
vessels  from  pilotage  charges  was  not  in  violation  of  the  treaty.  For  the  rea- 
son that  foreign  vessels  can  not  on  any  terms  enter  our  coastwise  trade,  the 
question  as  to  tolls  as  to  our  vessels  using  the  canal  is  purely  a  local  one.  The 
question  of  discrimination  or  inequality  of  treatment  can  not  arise.  The  terms 
of  a  treaty  can  not  be  held  to  apply  to  a  subject  about  which  one  of  the  parties 
has  no  interest  whatever  and  could  not  be  injured,  whatever  action  is  taken. 

The  localization  of  the  coastwise  trade  and  the  exclusion  of  it  from  foreign 
influence  or  interest  is  shown  in  the  now  well-established  principle  of  inter- 
national law  that  if  a  nation  opens  its  coastwise  trade  to  foreign  ships,  such 
foreign  ships  entering  into  such  coastwise  trade  will  be  regarded  as  ships  be- 
longing to  the  nation  under  whose  coast  trade  it  operates,  and  may  be  captured 
by  the  enemy  of  that  country  in  time  of  war  as  if  it  were  a  hostile  ship. 

Summary   of   Legal   Status. 

Viewed  with  regard  to  its  legal  aspects,  the  question  of  our  right  to  charge 
tolls  may  be  summed  up  as  follows: 

Foreign  ships  engaged  in  foreign  commerce  must  be  treated  alike;  there  must 
be  no  discrimination  in  favor  of  any  nation.  The  same  rule  applies  to  foreign 
Blips  engaged  in  commerce  between  American  and  foreign  ports.  American 
ships  engaged  in  foreign  commerce  or  in  commerce  between  American  and  for- 
eign ports  nisiy  be  charged  the  same  rates  as  foreign  ships  in  the  first  instance, 
but  the  amounts  thus  paid  may  be  refunded  in  part  or  in  whole  by  the  Govern- 
ment. 

American  ships  engaged  in  our  coastwise  or  domestic  trade  between  American 
ports  may  be  exempted  in  whole  or  in  part  from  payment  of  tolls. 

The  whole  question  as  to  the  legal  objections  to  free  tolls  may  be  summed  up 

i  two  propositions:  First.  The  question  is  hardly  a  debatable  one,  since  every- 
>  admits  that  we  may  refund  the  tolls  if  we  impose  them.  There  is  no  seri- 
ous difference  between  an  exemption  in  the  first  instance  and  a  collection  first 

95272 — 12090 


80 


and  a  refunding  afterwards.  The  final  result  is  the  same.  Second.  If  the  ques- 
tion is  debatable,  we  ought  not  to  give  away  a  right  before  it  is  claimed.  We 
ought  not  to  yield  a  principle  that  is  not  demanded.  It  will  be  time  enough 
to  yield  when  we  are  required  to  do  so,  either  through  diplomatic  negotiations 
or  upon  the  determination  of  an  arbitral  court. 

Every  patriotic  American  must  rejoice  that  we  are  thus  free  to  consider  the 
question  of  tolls  for  American  ships  on  its  merits  and  as  a  clear  question  of 
national  policy.  Everyone  should  be  glad  that  we  are  not  restrained  by  our 
treaty  stipulations,  either  technically  or  in  spirit,  to  give  to  American  shipping 
the  favorable  consideration  which  it  deserves.  Everyone  should  welcome  the 
opportunity  to  develop  our  policy  in  harmony  with  our  past  history  and  take 
such  action  as  must  be  for  the  best  interests  of  the  American  people.  [Applause.] 
*  *  ***** 

Benefits. 

It  is  argued  that  it  will  be  of  no  benefit  either  to  the  ships  or  to  the  people  to 
remit  the  tolls. 

It  is  contended  that  a  toll  of  $1  per  net  ton  will  not  be  large  enough  to  ap- 
preciably affect  the  traffic.  But  it  is  shown  that  vessels,  in  order  to  profitably 
use  the  canal,  will  be  of  from  4,000  to  10,000  net  registered  tonnage.  A  charge 
of  $4,000  to  $10,000  on  a  single  voyage  is  not  an  inconsiderable  item.  It  is 
almost  self-evident  that  to  thus  reduce  the  expense  of  a  contemplated  expedition 
will  directly  and  to  that  extent  encourage  it  and  thus  stimulate  'the  enterprise. 
This  will  be  of  direct  benefit  both  to  the  shipowner  and  to  the  shipper. 

The  observation  is  hardly  necessary  that  every  increased  item  in  the  cost  of 
transportation  while  paid  in  the  first  instance  by  the  shipper  is  added  to  the 
cost  of  the  product  and  is  paid  eventually  by  the  ultimate  consumer.  Thus  the 
burden  of  the  toll  charged  is  borne  by  the  people  and  not  by  the  shipowners. 
It  is  a  tax  on  them  and  not  on  the  ships. 

Experts  agree  that  as  a  general  proposition  heavy  freight  can  be  transported 
by  water  at  one-third  the  cost  of  railway  carriage.  If  that  be  true,  the  inaugu- 
ration of  water  as  a  competitor  of  railway  transportation  must  necessarily 
bring  reductions  in  railway  transportation  rates. 

It  is  admitted  by  transportation  experts  that  the  establishment  of  water 
transportation  will  bring  about  a  readjustment,  a  classification  of  traffic  by 
which  the  heavier  and  cheaper  commodities  will  go  to  the  water  carriers.  For 
instance,  lumber,  a  great  necessity  of  the  interior,  is  now  transported  by  rail 
from  the  Columbia  and  Puget  Sound  regions  to  Iowa  and  Illinois.  The  princi- 
pal cost  to  the  consumer  is  the  cost  of  transportation.  If  lumber  can  be 
shipped  through  the  canal  to  New  Orleans  and  thence  barged  to  Iowa  and  Illi- 
nois points  on  the  Mississippi,  the  transportation  cost  can  be  reduced  more  than 
two-thirds. 

An  experimental  shipment  of  barley  from  San  Francisco  was  recently  made. 
It  was  carried  by  ship  to  Panama,  thence  by  rail  across  the  Isthmus  to  Colon, 
thence  by  ship  to  New  Orleans,  and  thence  by  barge  up  the  Mississippi  to  St. 
Louis.  The  cost  of  carriage  was  $4,200  less  by  this  method  than  was  charged 
by  the  railways.  It  is  manifest  that  if  the  shipment  could  be  made  without 
breaking  bulk  from  San  Francisco  through  the  canal  to  New  Orleans,  and 
thence  by  barge  to  its  destination,  the  transportation  cost  could  be  still  further 
reduced. 

No  other  example  is  necessary  as  to  the  effect  of  water  competition  on  rail- 
way rates  than  the  reduction  of  rates  on  the  railways  east  of  Chicago  by  the 
competition  of  water  transportation  on  the  Great  Lakes  and  the  Erie  Canal. 
They  have  been  forced  down  by  such  competition  to  reasonable  figures. 

No  reduction  of  transcontinental  rates  can  be  made  that  will  not  be  reflected 
by  the  rates  to  and  from  interior  points,  and  the  great  Mississippi  Valley  will 
not  only  profit  directly  by  her  opportunity  for  river  rates,  connecting  at  New 
Orleans  with  ocean  shipping,  but  also  by  the  reflected  reductions  compelled 
by  transcontinental  competition. 

Is  it  a  Subsidy? 

It  is  asserted  over  and  over  again  that  to  exempt  our  coastwise  shipping  is  to 
subsidize  it.     The  contention  that  free  tolls  is  a  subsidy  is  strenuously  urged. 
Indeed  it  may  be  said  that  the  strength  of  the  opposition  to  free  tolls  lies  in 
95272—12090 


81 

that:  cry.     Subsidy  is  an  unpopular  word,  and  to  label  anything  a  subsidy  is  to 
discredit  it. 

But  free  tolls  is  not  in  any  sense  a  subsidy.  If  to  make  free  a  Government 
improvement  for  the  use  of  American  citizens  is  a  subsidy,  then  all  public  im- 
provements are  subsidies.  Hundreds  of  millions  have  been  spent  on  all  kinds 
of  public  improvements  all  over  the  land.  Harbors  have  been  improved,  rivers 
dredged  and  canalized,  canals  have  been  constructed — all  have  been  made  free 
io  American  citizens  because  paid  for  by  their  money,  and  yet  these  have  not 
been  regarded  as  subsidies.  It  is  impossible  to  equalize  the  benefits  of  any 
public  improvement.  In  the  view  of  gentlemen  here  if  a  discrimination  is 
shown  a  subsidy  is  established.  On  that  line  of  reasoning  a  discrimination  is 
made  against  the  people  of  Indiana  whenever  a  post  office  is  built  in  Ohio.  If 
that  is  logical,  a  discrimination  is  made  against  California  whenever  an  Atlantic 
port  is  improved. 

******* 

The  Soo  Canal  connects  Lakes  Superior  and  Huron.  Through  it  passes  an 
almost  incredible  commerce.  Thirty-six  million  tons  passed  through  it  last 
year.  Why  not  tax  that  commerce?  That  canal  was  built  by  the  Government. 
It  is  maintained  at  large  expense  by  the  Government.  But  no  one  proposes  tolls 
there.  Is  the  exemption  from  tolls  there  a  subsidy?  And  if  not  there,  why  at 
Panama? 

But  the  question  is  not  one  of  subsidy.  To  impose  tolls  on  American  ships 
at  Panama  is  to  tax  commerce. 


American    Interests. 

It  is  particularly  noticeable  that  in  this  debate  all  appeals  to  American  in- 
terests are  deprecated  and  condemned.  It  has  been  said  as  applicable  to  those 
who  think  that  American  interests  are  entitled  to  consideration  by  an  American 
Congress  that  "patriotism  is  the  last  refuge  of  a  scoundrel."  It" has  been  said 
that  we  never  hear  of  the  American  flag  in  this  House  but  there  is  some  sinister 
motive  behind  it.  Singular  sentiments  these  coming  from  Representatives  of 
the  American  people !  And  remarkable  certainly  must  be  conditions  that  would 
warrant  condemning  as  demagogic  all  arguments  for  the  protection  and  pres- 
ervation of  American  interests! 

It  may  be  thought  by  some  gentlemen  that  the  only  persons  professing  pa- 
triotism in  America  to-day  are  scoundrels,  and  that  no  expression  of  love  for 
the  American  flag  is  now  made  unless  to  cover  graft.  But  there  are  some  of  us 
who  refuse  to  accept  such  a  belief.  There  are  some  of  us  who  even  confess  to 
a  belief  that  there  is  still  some  patriotism  in  the  land;  that  there  are  still  to  be 
found  among  our  people  those  who  love  the  flag  and  what  it  represents.  There 
are  some  of  us  who  believe  that  the  day  has  not  yet  come  when  it  is  necessary 
to  apologize  for  an  honest  endeavor  to  protect  and  preserve  the  interests  of  the 
American  people.  [Applause.] 


FROM  ADDRESS  OF  HON.  JOSEPH  R.  KNOWLAND,  OF  CALIFORNIA, 
BEFORE  THE  LAKE  MOHONK  CONFERENCE  ON  INTERNATIONAL 
ARBITRATION,  LAKE  MOHONK,  N.  Y.,  MAY  16,  1913. 

[Published  in  Congressional  Record  Tuesday,  May  20,   1913.] 

The  Rights  of  the  United  States  at  Panama Significance  of  the  Objec- 
tions  of   Great   Britain   to   the   Panama   Canal    Act. 

Mr.  J.  R.  KNOWLAND.  No  patriotic  American  would  countenance  the 
violation  by  this  country  of  a  sacred  treaty  obligation.  On  the  other  hand* 
would  not  the  citizen  be  lacking  in  patriotism  who  would  hastily  and  without 
most  careful  and  painstaking  investigation  blindly  accept  an  interested  foreign 
nation's  interpretation  of  a  disputed  treaty,  a  construction  that  would  not 
only  deprive  this  country  for  all  time  of  most  important  commercial  advantages, 
but  would  be  a  surrender  of  invaluable  rights  affecting  the  very  safety  of  the 
Tutted  States?  • 

05272° — 12090 6 


82 

Treaty  Obligations  Fully  Considered  by  Congress. 

It  has  been  charged,  that  when  the  Panama  Canal  bill  dealing  with  the  sub- 
ject of  tolls  was  before  Congress  that  the  question  of  our  treaty  obligations  was 
not  given  the  proper  consideration.  The  truth  is,  and  I  challenge  a  denial, 
because  the  record  bears  me  out,  that  no  question  has  been  before  Congress  in 
years  in  which  greater  interest  was  manifested  and  upon  which  more  exhaustive 
debate  was  had. 

The  bill  was  reported  to  the  House  from  the  Committee  on  Interstate  and 
Foreign  Commerce  on  March  16,  1912.  I  presented  on  March  20  the  minority 
report  which  upheld  the  right  of  the  United  States  Government  to  pass  free  of 
toll  its  own  ships  as  well  as  American  coastwise  ships.  Copies  of  both  the 
majority  and  minority  reports-  were  placed  in  the  hands  of  every  Member  of 
the  House  accompanied  with  a  letter  calling  particular  attention  to  the  toll 
section.  It  was  eot  until  May  21,  two  months  later,  that  the  toll  provision  was 
voted  upon.  While  the  bill  was  actually  considered  in  the  House  but  six  days, 
the  time  allotted  was  longer  than  usually  accorded  measures  other  than  great 
appropriation  bills.  The  chief  debate  was  upon  the  toll  provision  which  natu- 
rally provoked  a  discussion  of  the  concomitant  question  of  our  treaty  obliga- 
tions. The  amendment  providing  free  tolls  for  our  American  coastwise  ships 
was  adopted  on  roll  call  by  a  majority  of  19.  This  vote  carries  with  it  a  par- 
ticular significance  when  we  consider  that  the  majority  of  the  committee  in 
charge  of  the  bill  opposed  free  tolls,  which  made  the  fight  more  difficult  owing 
to  the  inclination  of  Members  to  follow  committee  recommendations  as  a  matter 
of  regularity.  Let  it  also  be  borne  in  mind  that  this  vote  was  taken  before 
either  the  national  platforms  of  the  Democratic  or  Progressive  Parties  had 
declared  in  favor  of  the  policy  of  free  tolls  for  American  coastwise  ships. 

The  Bill  in  the  Senate. 

The  bill  then  went  to  the  Senate,  and  on  May  24  was  referred  to  the  Com- 
mittee on  Interoeeanic  Canals.  It  was  not  reported  from  that  committee  until 
June  12,  and  did  not  finally  pass  the  Senate  until  August  9.  In  the  meantime 
this  Government  was  officially  notified  of  Great  Britain's  protest.  The  vote  in 
the  Senate  on  the  provision  favoring  free  tolls  for  American  coastwise  ships 
was  44  in  favor  to  11  against,  a  decisive  majority  of  33.  The  debate  in  tlae 
Senate  was  even  more  exhaustive  than  that  which  took  place  in  the  House,  and 
both  in  the  Senate  and  House  there  was  not  a  Member  who  voted  for  the 
exemption  who  was  not  firmly  convinced,  after  careful  investigation,  that  the 
enactment  of  the  bill  into  law  would  not  be  in  contravention  of  any  treaty  obli- 
gation. I  know  from  personal  knowledge  that  in  the  House  many  voted  against 
the  exemption  because  opposed  to  the  policy,  but  still  held  strongly  to  the 
belief  that  our  treaty  obligations  did  not  prevent  us  from  favoring  our  own 
ships  if  we  saw  fit  to  do  so. 

Provisions   of   the  Panama   Canal  Act  to  Which   Great   Britain   Objects. 

The  Panama  Canal  act  of  August  24,  1912,  which  provides  for  "  the  opening, 
maintenance,  protection,  and  operation  "  of  this  American  waterway  is  objected 
to  by  Great  Britain — 

First.  Because  of  certain  language  contained  in  section  5,  which  provides 
in  fixing  tolls  that  the  rate  may  be  less  for  "  vessels  of  the  United  States  and  its 
citizens  than  the  estimated  proportionate  cost  of  the  actual  maintenance  and 
operation  of  the  canal."  The  significance  of  this  language  is  that  it  reserves 
to  the  United  States  the  right  to  pass  through  this  canal,  constructed  through 
what  is  practically  American  territory,  and  which  will  have  cost  our  Govern- 
ment over  $400,000,000  before  completed,  its  own  ships  of  war  and  other 
Government  vessels  free  of  toil.  It  also  leaves  open  for  the  future  determina- 
tion of  the  President  of  the  United  States  the  question  of  favoring  American 
ships  utilizing  the  canal  in  the  foreign  trade.  The  President,  however,  in  his 
Panama  Canal  proclamation  of  November  13,  1912,  fixed  the  same  rate  of  toll 
for  American  ships  in  the  foreign  trade  as  for  foreign  ships. 

Second.  Great  Britain  objects  to  the  language  of  this  same  section  by  which 
we  fulfill  our  treaty  obligations  with  the  Republic  of  Panama  in  accordance 
with  article  19  of  that  convention,  permitting  the  Government  of  the  Republic 
of  Panama  "  to  transport  over  the  canal  its  vessels  and  its  munitions  of  war  in 
such  vessels  at  all  times  without  the  payment  of  tolls." 
95272—12090 


83 

Third.  Great  Britain  further  objects  to  the  exemption  from  the  payment  of 
tolls  of  "American  vessels  engaged  in  the  coastwise  trade  of  the  United  States." 

Fourth.  It  is  attempted  to  limit  and  restrict  our  power  even  to  remit  tolls  as 
is  done  by  certain  foreign  nations  using  the  Suez  Canal,  although  the  Hay- 
Pa  uacefote  treaty,  according  to  the  British  note  of  November  14,  1912,  aimed 
"  at  carrying  out  the  neutralization  of  the  Panama  Canal  by  subjecting  it  to 
the  same  regime  as  the  Suez  Canal." 

Fifth.  Section  11  of  the  act.  which  seeks  to  prevent  railroad  control  of  this 
waterway  is  questioned  by  Sir  Edward  Grey  because  of  the  fear  that  its  pro- 
visions may  apply,  as  they  unquestionably  do  in  my  opinion,  to  the  Canadian 
transcontinental  railroads  which  have  voluntarily  placed  themselves  under  the 
provisions  of  the  interstate-commerce  act  of  the  United  States. 

Significance  of  British  Objections. 

To  sum  up  the  British  objections,  we  are  denied  the  right  to  pass  free  of  toll 
our  own  battleships  and  other  Government  vessels;  ships  engaged  in  the  coast- 
wise trade  of  the  United  States,  in  which  traffic  the  ships  of  England  can  not 
now  engage,  must  pay  a  toll  in  passing  through  this  American  waterway;  we 
are  virtually  asked  to  violate  our  treaty  obligations  with  the  Republic  of 
Panama :  there  is  a  practical  denial  of,  or  at  least  an  attempt  to  limit,  our  right 
to  follow  at  Panama  the  practice  of  foreign  nations  in  remitting  tolls  to  mer- 
chant ships  through  the  Suez  Canal,  thus  placing  this  country  at  a  disadvantage, 
and  finally,  in  reference  to  the  excellent  provisions  of  section  11,  we  are  threat- 
ened with  a  protest  if  Canadian  steamships  owned  by  Canadian  railroads, 
which  railroads  have  voluntarily  come  under  the  interstate-commerce  act  and 
thus  subjected  themselves  to  the  same  restrictions  and  regulations  as  American 
railroads,  are  to  be  amenable  to  the  same  laws.  Was  there  ever  a  more  strik- 
ing example  of  inconsistency?  Equality  of  treatment  demanded  for  British 
shipowners  in  sharing  benefits,  but  a  protest  against  equal  treatment  when  the 
act  imposes  restrictions  applying  to  American  shipowners! 

I  call  attention  in  detail  to  these  British  objections  because  there  are  evi- 
dently many  citizens  who  have  been  led  to  believe  that  the  protest  refers  only 
to  the  exemption  of  American  coastwise  ships.  By  this  brief  statement  it  can 
be  appreciated  that  the  protest  is  more  far-reaching  and  consequential. 

British  Protest  Inspired  by  Canadian  Railroads. 

It  is  generally  believed  in  Washington  that  the  British  protest  was  due  to 
the  action  of  Canadian  railroad  officials.  Prior  to  the  receipt  of  the  first  English 
note  certain  Government  officials  of  Canada  visited  England,  and  we  were  in- 
formed by  cable  dispatches  printed  in  the  newspapers  that  they  took  up  this 
question  with  particular  reference  to  the  provisions  of  section  11,  the  railroad 
section.  Of  course,  they  had -the  sympathy  and  active  support  of  American 
transcontinental  railroad  interests,  which  interests  are  now  engaged  in  urging 
the  repeal  of  the  objectional  provisions  of  the  canal  act,  namely,  sections  5  and 
11.  I  am  fair  and  frank  enough  to  admit  that  many  excellent  citizens,  advo- 
cates of  peace — and  I  am  a  peace  advocate  and  in  favor  of  arbitration,  as  I 
will  show  later — favor  repeal  because  of  the  belief,  and  in  some  instances  solely 
upon  the  authority  of  certain  Americans,  that  we  have  violated  a  treaty.  I  am 
constrained  to  direct  attention  to  the  fact  that  there  are  representatives  of 
powerful  interests  favoring  repeal  who  are  crying  "  live  up  to  our  treaty  obliga- 
tions," but  who  are,  I  fear,  far  less  interested  in  this  phase  of  the  question 
than  they  are  in  the  more  important  consideration  of  preventing  the  canal  from 
becoming  too  great  a  competitor  of  the  transcontinental  railroads. 

Analysis  of  Situation. 

Article  3,  paragraph  1,  of  the  "Hay-Pauncefote  treaty,  which  it  is  claimed  we 
violate,  reads  as  follows : 

That  the  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and-  of  war  of  all 
nations  observing  these  rules  on  terms  of  entire  equality,  so  that  there  shall  be  no  dis- 
crimination against  any  such  nation  or  its  citizens  or  subjects  in  respect  to  the  condi- 
tions or  charges  of  traffic  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be 
just  and  equitable. 

95272—12090 


84 

I  have  always  contended  that  this  section  simply  bound  us  as  the  owners  of 
ilie  canal  to  treat  all  foreign  nations  fairly,  preventing  discrimination  in  favor 
of  one  foreign  nation  as  against  another.  The  use  of  the  words  "  vessels  of 
war "  to  my  mind  is  conclusive  evidence  that  the  word  "  vessels "  referred 
exclusively  to  foreign  nations,  for  it  is  inconceivable  and  a  reflection  upon  the 
patriotism  of  the  framers  of  the  treaty  that  the  United  States  would  foreclose 
its  right  to  pass  free  of  toll  through  its  own  waterway  warships  as  well  as 
lighthouse  tenders,  revenue  cutters,  transports,  and  other  craft.  Realizing  the 
force  of  this  argument  the  opponents  of  exemption  now  say  that  we  must  con- 
sider this  section  in  connection  with  certain  language  of  the  Clayton-Bulwer 
treaty  (which  many  had  supposed  was  superseded  by  the  Hay-Pauncefote  con- 
vention) contained  in  article  8,  which  still  compels  us  to  carry  the  burden  of 
that  instrument.  What  is  the  meaning  of  neutralization?  Many  authorities 
contend,  and  I  think  rightfully,  that  neutralization  can  not  by  any  strained  con- 
struction be  inferred  to  mean  conditions  of  traffic,  but  relates  only  to  conditions 
of  war. 

Interpretation   of   Senators   Present   When    Hay-Pauiicefote   Treaty   Was 

Pending. 

The  contention  has  been  made  that  the  Senate  understood  that  the  words 
"  all  nations "  included  the  United  States  and,  with  this  conception  of  the 
treaty,  voted  down  an  amendment  which  in  specific  language  reserved  to  the 
United  States  the  right  to  exempt  American  coastwise  ships  from  the  payment 
of  tolls.  They  neglect  to  mention  that  several  amendments  were  decisively 
rejected  that  permitted  us  to  fortify  the  canal,  their  rejection  being  due  to  the 
belief  on  the  part  of  Senators  that  we  had  that  right  without  such  a  provision. 
Evidence  which  I  will  now  submit  proves  that  the  same  opinion  prevailed  touch- 
ing our  right  to  exempt  American  coastwise  shipping. 

The  Bard  Amendment. 

I  have  here  a  letter  from  Senator  Bard,  who  resides  in  California,  which  is 
conclusive.  I  will  read  the  following  extracts  from  this  letter : 

When  my  amendment  was  under  consideration  it  was  generally  conceded  (the  italics 
are  his)  by  Senators  that  even  without  that  specific  provision  the  rules  of  the  treaty 
would  not  prevent  our  Government  from  treating  the  canal  as  part  of  our  coast  line,  and 
consequently  could  not  be  construed  as  a  restriction  of  our  interstate  commerce,  forbid 
ding  the  discrimination  in  charges  for  tolls  in  fa,vor  of  our  coastwise  trade,  and  this 
conviction  contributed  to  the  defeat  of  the  amendment. 

We  will  not  rest  our  case  in  this  particular  upon  the  statement  of  the  author 
of  the  amendment,  but  will  quote  a  Senator  who  voted  against  the  amendment, 
no  less  an  illustrious  Member  of  the  Senate  than  Hon.  HENRY  CABOT  LODGE 
who  was  one  of  the  11  Senators  who  voted  last  year  against  exempting  coast- 
wise ships,  so  he  must  be  regarded  as  a  disinterested  witness.  I  quote  from  the 
Congressional  Record  of  July  17,  1912 : 

Mr.  LODGE.  Mr.  President,  it  so  happened  that  I  was  in  London  when  the  second  Hay 
Pauncefote  treaty  was  made,  and,  although  the  draft  was  sent  from  this  country,  thai 
treaty  was  really  made  in  London.  I  mention  this  merely  to  show  that  I  had  r5ome 
familiarity  with  the  formulation  as  well  as  the  ratification  of  that  treaty.  When  the 
treaty  was  submitted  by  the  President  to  the  Senate,  it  so  happened  that  I  had  charge 
of  it  and  reported  it  to  the  Senate. 

The  second  Hay-Pauncefote  treaty,  as  Senators  will  remember,  embodied,  in  substance 
the  amendments  wrhich  the  Senate  had  made  to  the  first  Hay-Pauncefote  treaty.  England 
had  refused  to  accept  those  amendments,  and  then  the  second  treaty  was  made  embody 
ing  in  principle  all  for  which  the  Senate  had  contended. 

When  I  reported  that  treaty  my  own  impression  was  that  it  left  the  United  States 
in  complete  control  of  the  tolls  upon  its  own  vessels.  I  did  not  suppose  then  that  there 
was  any  limitation  upon  our  right  to  charge  such  tolls  as  we  pleased  upon  our  own  ves- 
sels, or  that  we  were  included  in  the  phrase  "  all  nations." 

Again,  on  July  20,  1912,  Senator  LODGE  stated  on  the  floor  of  the  Senate  in 
reiteration  of  this  view: 

I  voted  against  it  in  the  belief  that  it  was  unnecessary ;  that  the  right  to  fix  toils,  if 
we  built  the  canal  or  it  was  under  our  auspices,  was  undoubted.  I  know  that  was  the 
view  taken  by  the  then  Senator  from  Minnesota,  Mr.  Davis,  who  was  at  that  time  chair- 
man of  the  committee.  I  certainly  so  stated  on  the  floor.  : 

I  personally  have  never  had  any  doubt  that  the  matter  of  fixing  tolls  must  necessarilj 

be  within  our  jurisdiction,   and  when   I   referred  to   our  going  to  The  Hague  as  useless 

I  did  not  mean  because  our  case  was  riot  a  good  one.     I  meant  because,  in  the  nature  of 

95272—12090 


85 

things,  we  could  by  no  possibility  have  a  disinterested  tribunal  at  The  Hague.  It  would 
be  for  the  interest  of  every  other  nation  involved  to  prevent  our  fixing  the  tolls  according 
to  our  own  wishes.  *  *  *  I  know  that  was  my  opinion  and  the  opinion  of  the  chair- 
man of  the  Committee  on  Foreign  Relations  at  the  time. 

Senator  CLAPP,  of  Minnesota,  who  was  present  when  the  Bard  amendment 
was  voted  upon,  holds  similar  views,  as  here  set  forth,  and  I  quote  from  the 
Congressional  Kecord  of  July  17,  1912: 

I  know  I  was  here  at  the  time,  although  I  do  not  recall  all  of  the  speeches.  But  while 
some  of  us  voted  insisting,  in  some  instances,  that  these  things  should  be  explicit  and  in 
others  voting  with  the  majority  upon  the  ground  that  they  were  covered  anyhow,  I 
believe,  both  with  reference  to  the  coastwise  trade  and  especially  with  reference  to  the 
question  of  fortification,  that  many  of  the  votes  cast  against  those  express  provisions 
were  cast  upon  the  theory  that  without  them  we  nevertheless  had  the  right  to  do  them. 

Mr.  O'GoRMAN.  That  the  provisions  were  unnecessary? 

Mr.  CLAPP.  Yes  ;  that  they  were  unnecessary. 

Senator  PERKINS,  then  and  still  u  Member,  stated  in  the  Senate  on  August  6, 
1912: 

I  wish  to  state  that  Senator  Davis,  of  Minnesota,  was  at  that  time  chairman  of  the 
Committee  on  Foreign  Relations.  He  was,  as  is  conceded  by  all,  an  authority  on  inter- 
national law,  and  took  the  view  stated  by  the  Senator  from  New  York  and  that  stated 
by  the  Senator  from  Washington.  There  is  no  question  about  it  that  the  rules  we  did 
make  were  to  govern  other  nations  than  ourselves. 

Situation  Affecting   the   Republic   of   Panama. 

As  I  have  already  set  forth,  the  British  note  of  November  14,  1912,  protests 
against  article  19  of  our  treaty  with  the  Republic  of  Panama  proclaimed  in 
1904.  For  over  eight  years  there  was  no  protest  on  the  part  of  Great  Britain 
against  this  alleged  discrimination  in  favor  of  the  ships  of  Panama.  Why  this 
belated  protest,  might  we  ask?  The  answer  is  plain.  The  contention  of  Great 
Britain  would  become  untenable  as  to  American  ships  if  exception  was  not  taken 
to  the  Panama  treaty. 

Senator  ROOT,  while  Secretary  of  State,  negotiated  a  treaty  with  the  Republic 
of  Colombia  which  permitted  that  Republic  to  pass  through  the  canal — 

Troops,  material  of  war,  and  ships  of  war  without  paying  any  duty  to  the  United 
States,  even  in  the  case  of  an  international  war  between  Colombia  and  another  country. 

It  was  ratified  by  the  United  States,  but  rejected  by  Colombia.  The  point  I 
wish  to  make  is  that  the  then  distinguished  Secretary  of  State  presumably  did 
not  consider  the  Colombian  convention  a  violation  of  the  Hay-Pauncefote  treaty, 
although  England  now  claims  that  a  similar  treaty  with  Panama  is  in  contra- 
vention of  treaty  rights. 

Similar  Question  Passed  Upon  by  the  Supreme  Court. 

One  phase  of  this  canal  controversy  has  been  directly  passed  upon  by  the 
Supreme  Court  of  the  United  States,  the  question  of  exempting  coastwise  ships. 
Mr.  Justice  White,  now  Chief  Justice,  wrote  the  opinion.  It  is  the  case  of 
Olson  f.  Smith  (195  U.  S.,  332),  in  which  the  court  held  that  the  State  law 
exempting  American  coastwise  vessels  from  pilotage  charges  was  not  in  viola- 
tion of  the  treaty,  which  provided  that  "  no  higher  or  other  duties  or  charges 
shall  be  imposed  in  any  ports  of  the  United  States  on  British  vessels  than  those 
payable  in  the  same  port  by  vessels  of  the  United  States."  The  point  of  this 
decision  bearing  upon  the  present  question  at  issue,  namely,  the  contention  that 
British  ships  would  not  be  discriminated  against  by  the  canal  act  because  they 
are  now  barred  by  law  from  engaging  in  coastwise  traffic,  is  as  follows: 

Nor  is  there  merit  in  the  contention  that  as  the  vessel  in  question  was  a  British  vessel, 
coming  from  a  foreign  port,  the  State  laws  concerning  pilotage  are  in  conflict  with  the 
treaty  between  Great  Britain  and  the  United  States.  Neither  the  exemption  of  coast- 
wise steam  vessels  from  pilotage  resulting  from  the  law  of  the  United  States  nor  an> 
lawful  exemption  of  coastwise  vessels  created  by  the  State  law  concerns  vessels  in  the 
foreign  trade,  and  therefore  any  such  exemptions  do  not  operate  to  produce  a  discrimina- 
tion against  British  vessels  engaged  in  foreign  trade  and  in  favor  of  the  vessels  of  the 
United  States  in  such  trade.  In  substance,  the  proposition  but  asserts  that  because  by 
the  Jaw  of  the  United  States  steam  vessels  in  the  coastwise  trade  have  been  exempt 
from  pilotage  regulations,  therefore  there  is  no  power  to  subject  vessels  in  foreign  trade 
to  pilotage  regulations,  even  though  such  regulations  apply  without  discrimination  to  all 
vessels  engaged  in  such  foreign  trade,  whether  domestic  or  foreign.- 
95272—12090 


86 

Tolls  Just  and  Equitable  Regardless  of  Exemption. 

The  point  raised  by  Great  Britain  that  by  exempting  coastwise  ships  we 
might  be  placing  a  greater  burden  upon  that  nation  has  been  fully  answered 
by  Secretary  Knox.  If  we  had  levied  a  toll  sufficient  to  pay  interest  upon 
the  investment  as  well  as  cover  expenses  of  maintenance  and  operation,  Great 
Britain  might  have  had  cause  to  complain,  but  in  framing  the  act  we  had  in 
mind  a  toll  that  would  attract  traffic  and  at  the  same  time  pay  the  expenses 
of  maintenance  and  operation.  The  total  cost  of  operation  and  maintenance, 
including  sanitation  and  civil  government,,  as  carefully  estimated  by  Col. 
Goethals,  will  not  exceed  $4,000,000  annually. 

The  tonnage  for  1914-15  when  the  canal  is  opened,  is  estimated  at  10.500,000 
tons.  Of  this  but  1,160,000  net  register  tons  are  estimated  as  coastwise. 
Deducting  this  from  the  total  leaves  9,340,000  tons,  and  with  a  toll  of  $1.20, 
which  is  in  accordance  with  the  President's  proclamation,  the  annual  income 
will  be  $11,208,000,  over  seven  millions  in  excess  of  the  cost  of  operation  and 
maintenance.  The  coastwise  exemption  in  no  way,  either  directly  or  indirectly, 
will  affect  the  charges  to  Great  Britain.  We  have  been  most  fair  in  our 
dealing  with  foreign  nations  as  to  charges. 

Foreign  Ships  to  Receive  Chief  Benefit  of  Waterway. 

Foreign  ships  will  derive  the  chief  benefit  from  the  canal  because  we  have 
practically  no  American  ships  in  the  foreign  trade.  Ninety-one  per  cent  of 
our  foreign  commerce  is  carried  in  foreign  ships.  Unless  we  grant  some  favors 
to  our  own  ships  in  the  coastwise  trade  our  benefit  will  be  small.  I  know  it 
is  contended  that  remission  of  the  toll  will  be  so  insignificant  as  affecting  a 
ton  of  freight  as  to  be  negigible.  If  so,  then  what  great  anxiety  for  repeal? 
If  a  ship  with  a  7,000  ton  net  register  capacity  passing  between  New  York 
and  San  Francisco  pays  a  toll  of  $8,400,  some  one  must  pay,  and  it  will  be 
hard  to  make  American  consumers  and  producers  believe  that  they  will  not 
assume  the  burden.  If  a  ship  is  half  loaded  the  toll  upon  each  ton  of  freight 
will  double,  because  the  ship  pays  in  accordance  with  its  total  net  register 
capacity. 

Free  Tolls  a  Benefit  to  Interior  of   Country. 

In  my  opinion  it  will  be  the  great  interior  of  the  United  States  that  will 
profit  chiefly  because  of  free  tolls,  and  particularly  those  sections  drained  by 
the  mighty  navigable  rivers.  Every  burden  placed  upon  traffic  will  impair 
the  usefulness  of  the  canal  as  a  competitive  route  and  narrow  its  benefits 
geographically.  Every  reduction  forced  by  sea  competition  will  be  reflected 
upon  rail  rates  throughout  the  entire  country,  as  has  always  been  the  case. 
The  output  of  American  shipyards,  according  to  the  Department  of  Commerce, 
will  be  greater  during  the  current  fiscal  year  than  for  many  years  past.  Not 
one  of  these  ships  I  am  informed  is  for  the  foreign  trade,  but  are  all  to  engage 
in  the  coastwise  traffic.  This  will  bring  about  the  keenest  competition,  par- 
ticularly in  view  of  the  fact  that  railroad  owned  or  controlled  ships  are 
barred  from  the  canal,  and  be  a  guaranty  that  to  the  American  people  will 
inure  the  chief  benefit  of  free  tolls.  This  great  activity  in  shipbuilding  should 
carry  some  significance. 

An  Impartial  Arbitral  Tribunal  Possible.  ' 

While  I  am  a  Calif ornian  it  does  not  follow,  even  in  view  of  recent  happen- 
ings in  my  native  State,  that  I  am  particularly  belligerent.  A  serious  con- 
tention with  Great  Britain  over  this  question  is  not  probable.  A  mere  sugges- 
tion of  war  is  abhorrent.  While  many  who  hold  similar  views  to  mine  upon 
the  abstract  question  of  our  right  to  control  the  canal  are  strongly  opposed  to 
submitting  this  question — a  question  which  I  will  admit  largely  concerns  a 
domestic  policy — to  arbitration,  I  will  frankly  state  I  do  not  go  so  far.  A  fair 
arbitral  tribunal  should  be  possible  for  the  determination  of  this  question  if  it 
can  not  be  settled  by  diplomacy.  The  Hague  would  not  be  such  a  body,  in  my 
opinion.  The  common  sense  of  the  American  and  English  people  should  enable 
these  English-speaking  nations  to  agree  upon  impartial  arbitrators.  Before 
such  a  body  our  case  is  so  strong  we  iiave  uotlnng  to  fear. 
95272—12090 


87 

Repeal  of  Law  Inadvisable. 

To  repeal  the  toll  provision  at  this  time  would  be  a  humiliating  acknowledg- 
ment that  after  expending  $400,000,000  in  the  construction  of  an  American 
canal,  through  what  is  practically  American  territory,  this  Nation  was  estopped 
forever  from  according  a  single  advantage  to  an  American  ship.  Other  nations 
might  remit  tolls  to  their  ships  as  they  are  doing  at  Suez  and  preparing  to 
do  at  Panama,  but  our  hands  would  be  virtually  tied.  We  would  be  compelled  to 
pay  a  toll  upon  Government  ships.  According  to  some  very  high  authorities, 
we  would  surrender  rights  that  might  imperil  our  very  existence  as  a  nation. 
Repeal  under  present  circumstances,  when  our  Government,  through  the  Depart- 
ment of  State,  has  taken  a  position  and  negoliations  are  under  way,  would  be 
most  inopportune.  It  would  be  an  unwarranted,  uncalled-for,  and  abject  sur- 
reuder^f  American  rights,  for-reaching  in  its  effect,  and  disastrous  to  American 
interests. 


[Senate  Doc.  No.  31,  63d  Cong.,  1st  sess.] 

FROM  ADDRESS  OF  DR.  HANNIS  TAYLOR  BEFORE  THE  AMERICAN 
SOCIETY  ON  INTERNATIONAL  LAW,  APRIL,   1913. 

Rule  of  Treaty  Construction  Known  as  Rebus   Sic   Stantibus. 

In  speaking  to  the  question,  "  What  is  the  international  obligation  of  the 
United  States,  if  any,  under  the  treaties,  in  view  of  the  British  contention?" 
Dr.  Hannis  Taylor  said,  in  part : 

At  the  end  of  a  century  of  peace  between  Great  Britain  and  the  United  States 
we  have  a  pending  problem,  whose  solution  is  to  test  the  strength  of  the  so-called 
moral  alliance  now  existing  between  the  two  grand  divisions  of  English-speaking 
peoples.  That  moral  alliance  made  a  tremendous  advance  after  Lord  Salisbury 
was  wise  enough  to  accept,  in  1895,  our  supreme  arbitrating  power  in  the  New 
World  as  asserted  by  President  Cleveland  and  Mr.  Olney  in  the  Venezuelan 
boundary  controversy.  Great  Britain  simply  enlarged  that  policy  of  concilia- 
tion when,  in  1901,  she  praeticaljy  abrogated  the  Clayton-Bulwer  treaty  with 
the  avowed  purpose  of  advancing  the  construction  of  a  ship  canal  "  by  whatever 
route  may  be  considered  expedient."  Great  Britain  really  had  nothing  to  give 
up  in  abrogating  that  treaty  which,  as  a  whole,  rested  upon  the  assumption 
that  Europe  was  to  have  an  interest  in  the  canal  because  European  capitalists 
were  to  build  it.  Th,e  fact  that  not  one  dollar  of  European  money  was  ever 
invested  in  the  enterprise  deprived  the  basic  idea  of  the  transaction  of  its  raison 
d'etre.  As  Great  Britain's  claim  of  a  protectorate  over  the  Mosquito  Indians 
in  Nicaragua  was  in  open  defiance  of  the  Monroe  doctrine  and  without  legal 
or  moral  foundation  her  case  can  draw  no  strength  from  that  source. 

Is  that  statement  justifiable?  In  a  notable  speech  made  in  the  Senate  of  the 
United  States  on  January  21,  1913,  the  Hon.  ELIHU  ROOT  said  Great  Britain 
had  "  a  protectorate  over  the  Mosquito  Coast,  a  great  stretch  of  territory  upon 
the  eastern  shore  of  Central  America  which  included  the  River  San  Juan  and 
the  valley  and  harbor  of  San'  Juan  de  Nicaragua,  or  Greytown.  All  men's 
minds  then  were  concentrated  upon  the  Nicaragua  Canal  route,  as  they  were 
until  after  the  treaty  of  1901  was  made.  Great  Britain  did  surrender  her  rights 
to  the  Mosquito  Coast  so  that  the  position  of  the  United  States  and  Great 
Britain  became  a  position  of  absolute  equality."  Against  that  statement,  in  which 
Senator  ROOT  has  made  a  forceful  summary  of  all  that  can  possibly  be  said  in 
favor  of  the  British  claim,  I  desire  to  set  some  extracts  from  a  remarkably  calm 
and  lucid  monograph  entitled  "  Great  Britain  and  the  Panama  Canal,"  published 
on  April  10,  1913,  at  Heidelberg,  by  George  C.  Butte,  who  says  "  the  writer  has 
endeavored  to  consider  all  questions  from  an  objective  standpoint — '  sachlich,' 
as  the  Germans  expressively  say.  This  has  been  made  the  more  possible  be- 
cause the  writer,  being  in  a  '  neutral '  land,  has  at  least  remained  uninfluenced 
by  local  sentiment."  This  manifestly  impartial  writer,  after  describing  the 
treaty  of  December  12,  1846,  with  Colombia  (which,  he  declares,  was  a  "de- 
fensive alliance  directed  against  the  only  power  that  was  at  that  time  hovering 
about  these  coasts  " ) ,  says : 

Following  the  treaty  of  1846  relating  to  the  Panama  route,  agents  of  the  United  States 
were  active  also  in  negotiating  with  the  Government  of  Nicaragua  for  the  control  of 
the  Nicaraguan  route  (the  Hise-Selva  convention  of  June  21,  1849  and  the  Squier-Zepeda 
general  treaty  of  September  3,  1849).  To  offset  this  diplomatic  advantage  Great  Britain 
95272—12090 


88 

was  seizing  territory  on  one  pretext  or  another  along  the  Mosquito  coast  and  in  Belize 
j>nd  threatening  to  take  the  port  of  San  Juan  de  Nicaragua  (Grey town)  in  order  to  get 
the  strategic  control  over  the  proposed  interoceanic  highway  by  way  of  Lake  Nicaragua. 
The  control  of  this  canal  route,  important  as  it  was  thought  to  be  to  the  welfare  and 
pafety  of  the  United  States,  was  apparently  to  be  won  only  at  the  cost  of  another  vital 
national  policy  namely,  that  the  Western  Hemisphere  should  not  be  made  a  field  of  future 
colonization  by  European  powers. 

Will  anyone  attempt  to  deny  that  that  is  a  perfectly  fair  statement  of  the 
conditions  under  which  Great  Britain,  in  open  defiance  of  the  Monroe  doctrine, 
*'  seizing  territory  on  one  pretext  or  another  along  the  Mosquito  coast  and  in 
Belize  and  threatening  to  take  the  port  of  San  Juan  de  Nicaragua  (Greytown) 
in  order  to  get  the  strategic  control  over  the  proposed  interoceanic  highway  by 
way  of  Lake  Nicaragua?"  Whatever  moral  equity  vested  in  Great  Britain 
under  the  terms  of  the  Clayton-Bulwer  treaty  rested  upon  that  basis  alone. 

After  reaching  that  conclusion,  Mr.  Butte  says :  %  » 

Just  how  much  of  the  Clayton-Bulwer  treaty,  if  any,  was  in  force  at  the  time  it 
Avas  suspended  in  1901,  and  what  fragments  of  it,  if  any,  had  any  practical  appli- 
cation to  the  radically  changed  conditions,  is  one  of  the  riddles  of  diplomacy  which 
some  modern  CEdipus  may  solve.  We  shall  in  a  subsequent  paragraph  hazard  an  opinion 
as  to  the  meaning  of  the  reference  in  the  preamble  of  the  Hay-Pauncefote  treaty  of 
Article  VIII  of  the  Clayton-Bulwer  treaty.  *  *  *  No  more  fundamental  error  is 
committed  generally  by  those  defending  the  British  view  on  the  present  controversy 
than  appears  in  the  following  statement  of  the  Government's  protest.  "  The  Hay- 
Pauncefote  treaty  does  not  stand  alone.  It  was  the  corollary  of  the  Clayton-Bulwer 
treaty  of  1850."  The  Hay-Pauncefote  treaty  contains  five  articles,  and  the  very  first 
article  unconditionally  abrogates  the  treaty  of  1850. 

"ARTICLE  I.  The  high  contracting  parties  agree  that  the  present  treaty  shall  super- 
sede the  aforementioned  convention  of  the  19th  of  April,  1850." 

It  would  be  difficult  to  say  any  more  clearly  that  the  parties  intended  to  give  that 
nrnimed  and  decrepit  instrument  a  decent  burial.  *  *  *  It  is  unreasonable  to  ad- 
vance claims  which  magnify  the  relation  and  enlarge  the  rights  of  Great  Britain  beyond 
those  she  would  have  had  if  the  canal  had  been  constructed  in  1850.  In  1901  the 
British  Government  itself  declared  that  it  had  no  intention  then  of  giving  "  to  Article 
VIII  of  the  Clayton-Bulwer  treaty  a  wider  application  than  it  originally  possessed." 
*  *  *  The  Clayton-Bulwer  treaty,  it  should  be  emphasized,  was  never  at  any  time 
in  effect  as  to  any  canal  route  but  the  Nicaragua  route.  Before  1901  the  United  States 
was  entirely  free  to  build  an  isthmian  canal  without  consulting  Great  Britain,  by  any 
one  of  the  other  18  different  routes  that  had  been  surveyed  and  declared  feasible.  By 
virtue  of  her  treaty  "of  1846  with  New  Granada,  she  was  directly  and  solely  charged 
with  the  prosecutio-i  of  the  Panama  route.  Great  Britain  was  well  aware  of  these 
facts.  They  gave  her  concern.  *  *  *  We  believe  the  meaning  of  the  Hay-Pauncefote 
treaty  can  be  found  within  the  four  corners  of  the  treaty  itself.  "  To  go  elsewhere  in 
search  of  conjectures  is  to  endeavor  to  elude  it."  From  the  standpoint  of  abstract  justice, 
the  pretension  of  Great  Britain  that  she  should  be  put  on  the  same  footing  as  respects 
the  use  and  enjoyment  of  the  Panama  Canal  as  the  United  States  seems  presumptuous. 
The  restriction  which  she  invokes  against  the  sovereign  right  of  the  United  States  to 
enact  legislation  affecting  its  internal  affairs  must  appear  in  express  language  in  the 
Hay-Pauncefote  treaty.  No  mere  implication  or  argumentative  deduction  will  suffice. 
And  if  we  adopt  the  rule  Lord  Clarendon  applied  against  the  United  States  in  con- 
struing the  Clayton-Bulwer  treaty  in  the  case  of  the  Mosquito  Indians,  to  the  effect  that 
"  the  true  construction  of  a  treaty  must  be  deduced  from  the  liberal  meaning  of  the  words 
employed  in  the  framing,"  it  will  be  hard  indeed  for  Great  Britain  to  prove  her  claims. 

And  yet  far  be  it  from  me  to  belittle  Great  Britain's  good  and  wise  motives 
in  doing  all  she  could  to  advance  the  building  of  an  interoceanic  canal.  The 
interests  of  civilization  demanded  it ;  the  interests  of  the  moral  alliance  be- 
tween Great  Britain  and  the  United  States  demanded  it ;  and  she  was  sincerely 
anxious  to  advance  both.  Let  us  never  forget  that  through  the  canal  at  Pan- 
ama the  fleets  of  Great  Britain  and  the  United  States  are  to  unite  as  a  great 
police  force  for  the  preservation  of  the  peace  of  the  world.  It  is  not  a  good 
time  to  quarrel  just  at  the  moment  when  we  are  about  to  join  hands  in  such  an 
undertaking.  And  here  it  may  be  well  to  remember  that  we  have  already 
made  a  bad  beginning.  Through  a  restless  and  unnecessary  impatience  we 
committed  an  unparalleled  act  of  international  violence  in  taking  away  the 
Canal  Zone  from  Colombia.  Despite  the  treaty  of  1846,  wherein  we  solemnly 
guaranteed  her  sovereignty  over  the  Isthmus,  we  ended  that  sovereignty  through 
a  transaction  which  has,  I  fear,  shocked  the  sensibilities  of  the  world.  Does  it 
not,  therefore,  behoove  us  to  be  calm,  discreet,  fair-minded  in  dealing  with  the 
second  great  question  of  international  law  and  diplomacy  which  the  building  of 
the  canal  has  presented  for  solution? 

Everyone  who  has  had  any  diplomatic  experience  knows  that  a  great  deal 
depends  upon  the  form  in  which  a  question  of  international  law  or  diplomacy  is 
stated.  In  one  form  it  will  arouse  every  possible  antagonism ;  in  another  it 
will  draw  all  minds  toward  conciliation.  Nothing  could  be  more  unfortunate, 
more  untactful,  than  the  form  in  which  the  question  of  the  canal  tolls  is  now 
pending.  A  large  body  of  our  citizens,  if  not  a  majority  of  them,  believe  that 
the  regulation  of  tolls  in  a  canal  built  with  $400,000,000  of  our  money  (without 

95272—12090 


89 

a  single  foreign  contribution)  through  our  own  territory  is  purely  a  domestic 
question  with  which  foreign  nations  have  nothing  to  do  whatever.  Upon  that 
theory  the  Congress  of  the  United  States  has  acted  already ;  it  has  disposed  of 
the  question  upon  that  basis.  When  under  those  circumstances  Downing  Street 
demands  the  repeal  of  that  act  of  Congress,  no  matter  how  respectful  the  terms 
of  the  demand  may  be,  a  large  body  of  our  people,  probably  a  majority,  are  up 
in  arms  against  what  they  denounce  as  an  insolent  attempt  at  foreign  dicta- 
tion. Under  such  conditions  I  feel  sure  that  the  act  in  question  can  not  be 
repealed.  If  it  could  be,  through  the  driving  force  of  the  party  to  which  I  be- 
long, I  believe  it  would  wreck  its  future.  The  need  of  the  hour  is  to  suspend 
the  menacing  and  probably  hopeless  contest  in  Congress  for  the  repeal  of  the  act 
to  which  Great  Britain  objects  until  diplomacy  can  find  a  path  leading  to  com- 
promise and  conciliation. 

As  treaties  stand  upon  a  basis  of  their  own,  entirely  apart  from  private  con- 
tracts, the  law  of  nations  has  always  recognized  the  fact  that  all  such  agree- 
ments are  necessarily  made  subject  to  the  general  understanding  that  they  shall 
cease  to  be  obligatory  so  soon  as  the  conditions  upon  which  they  were  executed 
are  essentially  altered.  The  principle  that  all  treaties  are  concluded  upon  the 
tacit  condition,  rebus  sic  stautibus,  clearly  recognized  by  Grotius  (Chap.  XVI,  s. 
XXV  et  seq.),  and  Vattel  (Book  2,  c.  13,  s.  200),  has  been  denied  by  no  modern 
authority.  Hall,  the  greatest  of  the  recent  English  publicists,  whose  book  is 
the  vade  inecuin  of  the  British  foreign  office,  declares  in  his  work  on  Interna- 
tional Law  (s.  116)  that  neither  party  to  a  treaty  "can  make  its  binding  effect 
dependent  at  will  upon  conditions  other  than  those  contemplated  at  the  moment 
when  the  contract  was  entered  into ;  and,  on  the  other  hand,  a  contract  ceases  to 
be  binding  so  soon  as  anything  which  formed  an  implied  condition  of  its  obliga- 
tory force  at  the  time  of  its  conclusion  is  essentially  altered."  Mr.  Oppenheim, 
now  professor  of  international  law  in  the  University  of  Cambridge,  has,  in  his 
great  work,  Volume  I,  page  550,  section  539,  said : 

It  is  an  almost  universally  recognized  fact  that  vital  changes  of  circumstances  may 
be  of  such  a  kind  as  to  justify  a  party  in  notifying  an  unnotiflable  treaty.  The  vast 
majority  of  publicists,  as  well  as  all  the  Governments  of  the  members  of  the  family  of 
nations,  agree  that  all  treaties  are  concluded  under  the  tacit  condition  rebus  sic  stantibus. 

In  my  own  work  on  International  Public  Law  (sec.  394)  I  have  stated  the 
matter  in  this  way : 

So  unstable  are  the  conditions  of  international  existence,  and  so  difficult  is  it  to  enforce 
a  contract  between  States  after  the  state  of  facts  upon  which  it  was  founded  has  sub- 
stantially changed,  that  all  such  agreements  are  necessarily  made  subject  to  the  general 
understanding  that  they  shall  cease  to  be  obligatory  so  soon  as  the  conditions  upon  which, 
they  were  executed  are  essentially  altered. 

Having  thus  restated  the  rule,  it  was  not  strange,  perhaps,  that  I  should  have 
been  the  first  to  apply  it  to  the  construction  of  the  Hay-Pauncefote  treaty  of 
1001.  which  contemplated  the  building  of  an  interoceauic  canal  by  the  United 
States  in  foreign  territory.  It  seems  to  me  that  a  radical  breach  of  the  tacit 
condition,  rebus  sic  stantibus,  occurred  when  in  November,  1903,  the  Canal 
Zone  became,  by  purchase,  the  domestic  territory  of  the  United  States.  It  is 
hard  to  deny  that  by  that  event  the  tacit  condition,  rebus  sic  stantibus,  was 
broken ;  and  yet  the  subject  is  a  delicate  one — it  should  be  approached  with 
great  calmness,  great  caution.  The  existence  of  the  rule,  rebus  sic  stantibus, 
as  applied  to  the  construction  of  treaties,  has  never  been  denied,  so  far  as  I 
know,  and  it  is  not  at  all  likely  that  Great  Britain  will  deny  its  existence  in 
the  present  instance. 

On  the  other  hand,  controversy  is  almost  sure  to  a'rise  as  to  its  application 
to  the  facts  of  a  particular  case  whenever  it  is  invoked.  As  it  will  always  be 
possible  to  invent  some  specious  reason  for  invoking  the  rule  in  any  case  in 
which  a  treaty  is  at  all  ancient,  the  burden  should  always  be  cast  upon  the 
party  who  sets  it  up  to  demonstrate  clearly  that  the  state  of  facts  upon  which 
the  treaty  was  founded  have  been  "  essentially  altered." 

All  of  \he  contemporaneous  evidence  demonstrates  beyond  any  doubt  what- 
ever that  no  one  contemplated  the  possibility  of  the  United  States  acquiring 
the  territory  through  which  the  canal  was  to  be  built  when  on  November  18, 
1901,  the  Hay-Pauncefote  treaty  was  concluded.  Just  two  years  thereafter,  on 
November  18,  1903,  M.  Bunau-Varilla.  the  accredited  representative  of  Panama, 
signed  with  Secretary  Hay  the  so-called  treaty  of  Panama,  which  was  duly 
ratified.  By  its  terms  it  granted  to  the  United  States  in  perpetuity  a  zone  of 
land  and  land  under  water  for  the  construction,  operation,  maintenance,  pro- 

95272—12090 


90 

tection,  and  sanitation  of  the  canal,  of  the  width  of  10  miles,  beginning  in  the 
Caribbean  Sea  and  extending  to  and  across  the  Isthmus  of  Panama  into  the 
Pacific  Ocean,  excepting  the  cities  of  Colon  and  .Panama.  The  treaty  grants 
to  the  United  States  "  all  the  rights,  power,  and  authority  within  the  zone  men- 
tioned "  which  the  United  States  would  possess  and  exercise  if  it  were  the 
sovereign  of  the  territory  within  which  the  said  lands  and  waters  are  located, 
"  to  the  entire  exclusion  of  the  Republic  of  Panama  of  any  such  sovereign  rights, 
power,  and  authority."  Great  Britain's  recognition  of  the  present  situation  harf 
been  thus  expressed :  But  "  now  that  the  United  States  has  become  the  prac- 
tical sovereign  of  the  canal  His  Majesty's  Government  do  not  question  its  title 
to  exercise  belligerent  rights  for  its  protection."  In  order  to  protect  the  condi- 
tion of  things  fixed  by  the  Hay-Pa nncefote  treaty,  from  disturbance  from  any 
revolution  that  might  occur  in  any  of  the  countries  which  the  canal  was  to 
traverse,  it  was  provided  in  the  treaty  "  that  no  change  of  territorial  sover- 
eignty or  of  the  international  relations  of  the  country  or  countries  traverse;! 
by  the  beforementioned  canal  shall  affect  the  general  principle  of  neutralization 
or  the  obligation  of  the  high  contracting  parties  to  the  present  treaty." 

No  serious  person  will  ever  attempt  so  to  distort  these  plain  and  explicit 
terms  as  to  make  it  appear  that  they  were  intended  to  cover  the  then  entirely 
unforeseen  acquisition  of  the  territory  now  known  as  the  Canal  Zone,  by  the 
United  States.  In  the  first  place  the  explicit  terms  used  exclude  such  an  idea. 
The  terms  of  the  treaty  fix  the  fact  that  the  "  change  of  territorial  sovereignty  " 
referred  to  was  such  change  as  might  take  place  in  "  the  country  or  countries 
traversed  by  the  before-mentioned  canal."  As  the  country  or  countries  to  be 
traversed  were  thousands  of  miles  from  the  limits  of  the  United  States,  there 
can  be  no  possible  doubt,  no  possible  ambiguity,  as  to  the  meaning  intended. 
The  clause  was  naturally  inserted  to  guard  the  treaty  against  impairment  by 
the  not  infrequent  revolutionary  changes  that  periodically  occur  in  Latin- 
America.  It  had  no  possible  reference  to  the  acquisition  of  sovereignty  by  the 
United  States,  a  contingency  of  which  no  one  then  dreamed. 

Mr.  Butte  opens  the  monograph  heretofore  quoted  with  this  statement : 

He  deceives  himself  grievously  who  believes  the  United  States  made  the  stupendous 
sacrifice  of  human  energy  and  public  money  necessary  to  build  the  Panama  Canal,  "  the 
greatest  liberty  man  has  ever  taken  with  nature,"  with  any  other  purpose  in  view  than 
the  national  advantage  of  the  United  States— commercial  and,  above  all,  political 
advantage. 

Through  our  own  unaided  efforts,  and  the  expenditure  of  $400,000,000  of  our 
own  money,  we  are  about  to  realize  the  dream  of  centuries — a  dream  in  which 
Goethe  indulged  as  early  as  1827,  wishing  at  the  same  time  that  his  life  might 
be  prolonged  50  years  so  that  he  could  see  it  realized.  What  candid  mind  is 
willing  to  declare  ihat  the  conditions  under  which  we  are  now  completing  this 
great  enterprise,  at  our  own  expense,  through  territory  as  completely  our  own 
as  the  District  of  Columbia,  are  not  "  essentially  "  different  from  the  conditions 
existing  in  1901  when  we  undertook  to  build  the  canal  through  foreign  terri- 
tory? Who  can  believe  that  if  we  were  concluding  the  Hay-Pauncefote  treaty 
to-day  we  would  make  any  stipulation  with  a  foreign  power,  not  contributing 
one  cent  to  the  enterprise,  to  the  effect  that  we  shall  not  exercise  the  sovereign 
right  to  legislate  as  to  our  own  property  and  our  own  citizens  within  our  own 
territory  without  the  consent  of  that  foreign  power,  especially  when  we  remem- 
ber that  the  Clayton-Bulwer  treaty  was  never  in  effect  as  to  any  route  but  the 
Nicaragua  route? 

The  conclusion  is  irresistible  that  by  the  radical  changes  wrought  in  condi- 
tions existing  at  the  time  the  Hay-Pauncefote  treaty  was  made,  through  the 
subsequent  purchase  of  the  Canal  Zone  by  the  United  States,  the  treaty  as  a 
whole  became  voidable.  Or,  to  use  the  words  of  Prof.  Oppenheim,  the  vital 
change  wrought  by  the  subsequent  purchase  of  the  Canal  Zone  rendered  an 
otherwise  "  unnotifiable  treaty "  notifiable.  Under  the  universally  accepted 
rule  of  rebus  sic  stantibus,  so  luminously  expounded  by  the  greatest  of  the 
recent  English  publicists,  we  have  the  right  and  Great  Britain  has  the  right 
to  call  a  diplomatic  conference  in  order  to  make  such  modifications  in  the  terms 
of  this  voidable,  or  "  notifiable,"  treaty  as  either  party  may  desire.  We  may 
admit,  if  we  see  fit,  for  the  sake  of  the  argument  at  least,  that  the  expression 
"  all  nations  "  in  article  3  of  the  treaty  was  originally  intended  to  include  the 
United  States,  If  it  did,  we  now  have  a  perfect  right,  under  the  rule  of  rebus 
sic  stantibus  to  demand  a  modification  as  the  treaty,  as  a  whole,  has  become 
voidable,  or  "  notifiable,"  because  the  conditions  upon  which  it  was  executed 
95272—12090 


91 

have  been  "  essentially  altered  "  through  subsequent  events.  There  is  not  the 
slightest  danger  of  the  British  foreign  office  denying  that  universally  r.dmitted 
rule  for  the  construction  of  treaties;  first,  because  Great  Britain  is  estopped  by 
the  expositions  of  her  own  publicists :  second,  because  she  is  estopped  by  her 
diplomatic  action  in  conceding  the  principle  to  Russia  when  in  1870  that  conn- 
try  claimed  the  right  to  be  released,  through  subsequent  events,  from  some  of 
the  vital  provisions  of  the  treaty  of  Paris  relating  to  the  Black  Sea.  Let  us 
then  transfer  this  controversy  at  once  from  the  halls  of  Congress  to  the  cabinets 
of  diplomacy,  where  it  can  be  dealt  with  dispassionately  and  tactfully,  with  aa 
honest  desire  to  reach  a  conclusion  just  and  honorable  to  both  nations.  After 
many  years  of  effort  to  expound,  as  one  unbroken  story,  the  constitutional  and 
political  history  of  the  English  people  on  both  sides  of  the  Atlantic,  I  am  as 
devoted  as  any  American  citizen  can  be  to  the  maintenance  of  that  great  moral 
alliance  upon  which  depends,  to  so  great  an  extent,  the  future  peace  of  the 
world.  That  moral  alliance,  so  strong  in  recent  years,  may  be  materially 
weakened  in  the  near  future  by  bungling  mismanagement.  For  the  moment 
we  have  the  cart  before  the  horse.  Let  diplomacy  first  make  such  modifica- 
tions in  existing  legislation  as  may  be  necessary  to  carry  out  the  result  which 
diplomacy  may  reach. 

Above  ^all,  let  us  prevent  at  this  time  a  debate  in  the  two  Houses  of  the 
American  Congress  whose  only  fruit  will  be  bitterness  and  recrimination.  Mr. 
Butte.  writing  in  a  "  neutral "  land,  with  his  mind  "  uninfluenced  by  local  sen- 
timent," has  said : 

Four  solutions  of  the  controversy  may  be  considered:  (1)  Diplomatic  negotiations 
which  may  lead  to  mutual  concessions  and  an  amicable  settlement:  (2)  arbitration  before 
the  Permanent  Court  of  Arbitration  at  The  Hague;  (3)  arbitration  before  a  commission 
or  court  composed  solely  of  American  and  British  subjects  ;  (4)  submission  of  the  con- 
troverted questions  to  the  Supreme  Court  of  the  United  States.  The  first  appears  to  the 
writer  to  offer  the  best  hope  of  a  settlement. 

I  believe  that  under  existing  conditions  "  diplomatic  negotiations  "  offer  the 
only  hope  of  a  settlement — of  such  a  settlement  as  everyone  true  to  the  existing 
moral  alliance  between  Great  Britain  and  the  United  States  should  strive  to 
bring  about. 


[From  the  Congressional  Record,  Jan.  21,  1913.] 

BRITISH   AUTHORITIES   UPHOLD   THE   POSITION   OF   THE    UNITED 
STATES  IN   CANAL   CONTROVERSY. 

Mr.  J.  R.  KNOWLAND.  Mr.  Speaker,  I  ask  unanimous  consent  to  insert  in 
the  Record  articles  written  by  two  eminent  British  authorities  dealing  with  the 
controverted  sections  of  the  Panama  Canal  act,  which  articles  appeared  in  the 
November  number  of  the  Law  Magazine  and  Review,  a  quarterly  review  of 
jurisprudence  published  in  London. 

There  was  no  objection. 

The  articles  above  referred  to  are  as  follows: 

I.    The  International  Status  of  the  Panama  Canal. 

(By  Edward  S.  Cox-Sinclair.) 

It  is  always  difficult  in  the  conflict  of  national  interests  to  secure  a  calm 
scrutiny  of  any  international  convention.  It  is  still  further  difficult  when 
within  each  of  the  signatory  States  conflicting  constructions  may  commend  them- 
selves to  rival  commercial  interests.  The  difficulty  is  still  further  accentuated 
when,  within  either  of  the  signatory  States,  an  electoral  controversy  is  pend- 
ing, in  the  determination  of  which  a  potent  factor  may  conceivably  be  the  atti- 
tude toward  the  convention  of  one  or  more  of  the  persons,  or  of  one  or  more  of 
the  parties,  involved  in  the  political  strife.  The  bases  for  the  construction  of 
the  international  conventions  which  control  the  commercial  neutralization  of 
the  Panama  Canal  are — on  all  these  grounds — at  this  juncture  singularly  the 
province  of  the  international  lawyer. 

At  the  outset  of  the  inquiry  it  is  expedient  to  eliminate  those  elements  which 
tend  to  obscure  the  consideration  of  main  points.  And  in  the  first  place,  those 
responsible  for  the  recent  decision  of  the  Legislature  of  the  United  States  must 
95272—12090 


92 

be  assumed  to  have  acted  with  honest  regard  to  international  obligations,  as 
they  presumed  them  to  exist,  equally  with  an  appreciation  of  the  national  inter- 
ests which  they  sought  to  serve.  On  the  other  hand,  it  must  be  assumed  that  the 
criticism  which  has  been  directed  to  that  decision  is  based  upon  a  sincere  desire 
to  claim  nothing  exceeding  just  consideration. 

Much  again  has  been  said,  with  little  approach  to  accuracy,  by  those  who 
demand  investigation,  regarding  the  supposed  obligation  on  the  part  of  the 
United  States  to  refer,  as  a  matter  of  abstract  opinion,  the  issue  of  the  validity 
of  the  decision  of  the  Legislature  of  the  United  States,  and  the  construction  of 
the  international  documents  which  such  decision  may  affect,  to  any  international 
tribunal  of  arbitration,  whether  one  constituted  ad  hoc  or  one  existing  as  a 
matter  of  international  recognition  in  the  shape  of  what  is  shortly  known  as 
The  Hague  tribunal.  The  latter  court,  gradually  advancing  though  it  may  be 
to  international  acceptance,  can  not  yet  be  said  to  have  reached  the  point  of 
supplanting  the  traditional  right  and  efficacy  of  national  courts  to  deal  with 
questions  of  international  treaty  construction.  When  the  United  States  is 
directed  with  newspaper  unanimity,  but  with  scant  courtesy,  to  refer  the  ab- 
stract question  of  the  capacity  of  its  Legislature  to  act  in  accord  with  treaty 
obligations,  one  has  only  to  consider  the  probable  attitude  of  Great  Britain  if 
a  similar  statute  of  its  Parliament  was  on  similar  grounds  called  into  question. 
Firstly,  Great  Britain  could  point  out  that  if  the  perfection  of  impartiality  is 
demanded,  it  would  be  difficult  to  constitute  an  international  tribunal,  the  mem- 
bers of  which  would  not  be  drawn  from  States  interested  in  the  commercial 
neutrality  of  the  Panama  Canal.  Secondly,  it  could  point  out  that  its  own 
courts  were  fully  qualified,  according  to  the  acknowledged  doctrine  of  inter- 
national usage,  to  pass  upon  any  issue  involving  the  application  of  the  law  of 
nations.  And  thirdly,  it  could  rest  upon  the  immemorial  practice  by  virtue  of 
which  an  act  of  its  legislature  has  not  been  treated  as  subject  to  the  judicial 
review  of .  constituted  foreign  opinion.  It  would  be  a  courageous  jurist  who 
would  aver  that  the  Supreme  Court  of  the  United  States,  the  ultimate  arbiter 
of  the  very  Constitution  of  its  country,  is  ill  equipped,  it  would  be  a  courageous 
statesman  who  would  suggest  that  that  court  could  not  be  trusted  to  hold  the 
balance  fairly,  for  the  purpose  of  enforcing,  or  at  any  rate  of  declaring,  the 
claims  of  all  conflicting  interests. 

A  master  of  the  common  law  of  England  (and  incidentally  Sir  William 
Blackstone  lays  down  also  the  common  law  of  America)  points  out  that  "the 
law  of  nations  (whenever  any  question  arises  which  is  properly  the  subject 
of  its  jurisdiction)  is  here  adopted  in  its  full  extent  by  the  common  law,  and 
is  held  to  be  part  of  the  law  of  the  land  *  *  *  without  which  it  must  cease 
to  be  a  part  of  the  civilized  world"  (4  Comm.,  Chap.  IV)  ;  and  again,  a  hear- 
ing must  be  given  to  Lord  Mansfield  (citing  by  incorporation  very  learned  and 
irrefutable  authorities),  "I  remember  Lord  Hardwicke  declaring  his  opinion  to 
the  same  effect,  and  denying  that  Lord  Chief  Justice  Holt  ever  had  any  doubt 
as  to  the  law  of  nations  being  part  of  the  law  of  England."  (Triguet  v.  Bath 
(1764),  2  Burr.,  1478.)  Again,  Prof.  Scott  (Cases  on  International  Law,  1906), 
in  his  preface  states,  "Municipal  law  it"  (i  e.,  international  law)  "was  in 
England,  municipal  law  it  remained,  and  is  in  the  United  States."  Illustrations 
might  be  multiplied,  but  the  conclusion  is  irresistible  that  whatever  may  be  the 
value  of  the  other  conclusions  of  M.  Bunau-Variila  (the  plenipotentiary  who 
signed  the  treaty  under  which  the  United  States  acquired  from  Panama  the  10- 
mile  strip  through  which  the  canal  is  cut),  he  is  right  in  urging  that  the  Su- 
preme Court  of  the  United  States  is  competent  to  test  any  question  connected 
with  the  basic  law  of  the  canal. 

It  is  proposed,  therefore,  to  consider,  as  if  it  were  an  issue  depending  before 
the  Supreme  Court  of  the  United  States,  the  question  whether  the  recent  act  of 
the  Legislature  of  the  United  States  is  in  contravention  of  the  true  construction 
of  international  obligations  of  commercial  neutrality.  The  documents  which 
have  to  be  considered  are  naturally  (a)  the  Clayton-Bulwer  treaty  of  the  18th 
April.  1850,  in  so  far  as  it  was  intended  to  control  the  commercial  neutrality 
of  any  interoceanic  canal  between  the  Atlantic  and  the  Pacific;  (&)  the  Hay- 
Pauncefote  treaty  of  the  18th  of  November,  1901,  which  was  in  contemplation  of 
the  specific  canal  now  Hearing  completion,  and  incidentally  the  bearing  of  the 
Suez  Canal  Convention  of  Constantinople,  signed  between  nine  European  States 
(including  Great  Britain)  on  the  29th  October,  1888;  and  (c)  the  Bunau-Varilla 
treaty  of  the  18th  November,  1903,  providing  for  the  acquisition  by  the  United 
States  of  the  10-mile  strip  through  which  the  Panama  Caiial  is  cut. 
95272—12090 


93 

The  first  and  third  of  these  treaties  may  with  propriety  be  considered  in  the 
first  place,  because  they  contain  either  matters  introductory,  or  matters  relating 
retrospectively,  to  the  Hay-Pauncefote  treaty  itself. 

The  Clayton-Bulwer  treaty  of  1850  was  largely  a  self-denying  convention 
by  which  Great  Britain  and  the  United  States  undertook  to  refrain  from 
assuming  dominion  for  the  purpose  of  interoceanic  communication  over  any  part 
of  Central  America.  In  so  far  as  directly  concerns  the  present  controversy, 
the  material  parts  of  the  Clayton-Bulwer  treaty  may  be  summarized  as  follows: 
The  contracting  powers  proposed  to  set  forth  their  intentions  with  reference 
to  any  means  of  communication  by  ship  canal  to  be  constructed  between  the 
Atlantic  and  Pacific  Oceans ;  they  bound  themselves  not  to  obtain  any  exclusive 
control  over  such  ship  canal,  and  not  to  acquire,  directly  or  indirectly,  for  the 
subjects  or  citizens  of  the  one  any  rights  or  advantages  in  regard  to  commerce 
or  navigation  through  such  canal  which  should  not  be  offered  on  the  same  terms 
to  the  subjects  or  citizens  of  the  other;  they  bound  themselves  (art.  3)  to  pro- 
tect contractors  for  the  making  of  such  canal  if  undertaken  on  fair  and  equit- 
able lines ;  they  undertook  (art.  4)  to  use  their  influence  to  procure  the  establish- 
ment of  two  free  ports,  one  at  each  end  of  the  said  canal ;  they  bound  them- 
selves (art.  5)  to  withdraw  protection  from  the  persons  or  company  undertak- 
ing or  managing  the  same,  or  establishing  regulations  concerning  the  traffic 
thereupon,  in  a  way  contrary  to  the  spirit  and  intention  of  the  convention, 
either  by  making  unfair  discriminations  in  favor  of  the  commerce  of  one  of  the 
contracting  parties  over  the  commerce  of  the  other,  or  by  imposing  oppressive 
exactions  or  unreasonable  tolls;  they  engaged  (art.  6)  to  invite  every  friendly 
State  to  enter  into  the  like  stipulations,  to  the  end  that  all  other  States  might 
share  in  the  honor  and  advantage,  affirming  it  to  be  the  great  desire  of  the  con- 
vention that  the  canal  was  to  be  constructed  and  maintained  for  the  benefit  of 
mankind  on  equal  terms  to  all ;  they  agreed  (art.  7)  to  give  their  encouragement 
to  such  persons  or  company  as  should  first  offer  to  commence  the  same  with  the 
necessary  capital.  Then  follows  the  famous  article  8. 

It  will  be  observed  that  the  contemplation  of  the  Clayton-Bulwer  treaty  was 
the  undertaking  by  private  persons  with  sufficient  capital,  under  the  encourage- 
ment and  protection  of  the  high  contracting  parties,  to  create  the  canal,  and  the 
stipulation  that  after  the  creation  of  the  canal  the  high  contracting  parties, 
with  the  adhesion  of  as  many  friendly  States  as  possible,  were  negatively  to 
seek  no  preponderating  control,  and  affirmatively  to  enforce  equity  and  equality 
in  the  treatment  of  the  commerce,  not  only  of  the  parties  to  that  convention 
but  of  all  the  States  throughout  the  commercial  world. 

It  must,  of  course,  be  conceded  by  all  disputants  that  the  scope  and  bearing 
of  the  Hay-Pauncefote  treaty,  which  was  brought  into  existence  50  years  after, 
were  of  a  very  different  kind.  Shortly,  the  main  differences  may  be  grouped 
as  follows: 

(a)  "The  canal  was  not  to  be  formed  by  private  contractors  with  the  benevo- 
lent encouragement  of  Great  Britain  and  the  United   States,  but  was  to  be 
created  wholly  with  the  capital  and  through  the  efforts  of  the  United  States. 

(b)  The  adhesion  of  States  other  than  Great  Britain  and  the  United  States 
was  not  to  be  invited,  nor  were  they  to  be  asked  to  enter  into  stipulations  similar 
to  those  to  which  the  contracted  States  bound  themselves. 

(c)  Instead  of  the  United  States  and  Great  Britain  and  such  friendly  States 
as  adhered  jointly  affording  their  guaranty  for  the  maintenance  of  neutrality, 
it  was  intended  that  the  United  States  alone  should  be  the  guardian  of  the 
status  of  the  canal.     This  was  a  matter  to  some  extent  discussed  in  the  course 
of  the  negotiations  which  led  up  to  the  ratification  of  the  Hay-Pauncefote  treaty, 
the  object  of  Great  Britain  beiixg  broadly  stated  to  be  the  avoidance  of  the 
detriment  of  being  placed  in  a  less  advantageous  position  than  other  commercial 
powers. 

The  importance  of  the  close  scrutiny  of  the  Clayton-Bulwer  treaty  lies,  of 
course,  in  the  ascertainment  of  the  "  general  principle  of  neutralization " 
thereby  established.  It  seems  expedient  here  to  extract  and  define  that  "  gen- 
eral principle  "  in  so  far  as  it  can  be  deduced  from  the  wording  of  that  treaty, 
bearing  in  mind  that  the  exclusive  control  over  the  canal  i's  to-day  no  longer 
barred,  but  on  the  contrary  assigned,  to  the  United  States.  It  was  in  the  year 
1850  contemplated  that  the  canal  would  be  a  private  undertaking,  that  the  pro- 
moters and  administrators  of  that  undertaking  might  emanate  from,  and  might 
to  a  certain  extent  be  under  the  dominating  control  or  influence  of,  Great 
Britain  or  of  the  United  States,  or  of  one  or  more  of  the  States  adhering  to 

95272—12090 


94 

and  guaranteeing  the  convention  and  its  enforcement,  and  that  such  dominating 
State  might  seek  to  acquire  from  the  undertakers  for  its  subjects  or  citizens 
differential  rights  or  advantages  in  regard  to  navigation  through  the  canal. 
In  other  words,  all  commercial  States  heing  regarded  as  potential  customers  of 
the  private  enterprise,  it  was  provided  that  none  should  influence  a  preference 
to  the  detriment  of  any  other.  They  further  hound  themselves  to  give  protec- 
tion and  encouragement  to  such  private  undertakers  who  should  provide  capital 
on  the  one  hand  and  avoid  oppressive  exactions  or  unreasonable  tolls  on  the 
other.  Their  attitude  was,  in  other  words  (if  one  may  venture  an  analogy), 
that  of  a  combination  of  shipping  companies  engaged  in  rival  operations,  jointly 
agreeing  to  finance  a  proposed  canal  undertaking  on  the  basis  of  an  agreement 
between  themselves  not  to  seek  from  such  undertaking  any  exclusive  advantages 
or  preferential  treatment.  The  essence  of  the  neutrality  bargain  which  within 
the  Clay  ton-Bui  wer  treaty  extends  to  every  scheme  of  interoceanic  communica- 
tion was  the  maintenance  of  the  status  quo  of  the  conditions  of  commercial 
rivalry.  To  this  general  principle  we  propose  to  return  in  the  discussion  of 
the  precise  point  at  issue. 

A  review  of  the  material  documents  would  be  incomplete  without  reference 
to  the  Hay-Bunau-Varilla  treaty,  under  which  the  United  States  acquired 
from  the  Republic  of  Panama,  in  1903,  the  territorial  rights  to  the  strip  of 
land  through  which  the  cnnal  is  cut.  Under  this  treaty  (art.  18)  the  canal 
has  to  be  opened  in  conformity  with  the  stipulations  of  tiie  Hay-Pauncefote 
treaty.  It  is  true  that  this  treaty  in  itself  throws  little  lignt  oh  the  true  con- 
struction of  the  treaty  rights  of  Great  Britain.  It,  however,  is  clearly  a  conven- 
tion (dealing,  as  it  does,  with  the  title  to  a  portion  of  territory)  within  the 
cognizance  of  the  Supreme  Court  of  the  United  States. 

The  Hay-Pauncefote  treaty  of  1901  was  "  to  remove  any  objection  which 
may  arise  out  of  the  convention  of  the  19th  April,  1850,  commonly  called  the 
Clayton-Bulwer  treaty,  to  the  construction  of  such  canal  under  the  auspices 
of  the  Government  of  the  United  States,  imposing  the  general  principle  of 
neutralization  established  in  article  8  of  that  convention."  The  provisions  of 
the  treaty  may  be  summarized  as  follows: 

Article  1  supersedes  the  convention  of  1850  in  any  event  for  the  purposes 
of  the  proposed  canal,  and  possibly  altogether.  Article  2  provides  that  the 
United  States  shall  construct,  at  its  own  cost,  the  canal,  having  the  exclusive 
right  of  providing  for  the  regulation  and  management  thereof.  Article  3 
provides  that  the  United  States  should  adopt  as  the  basis  of  the  neutralization 
of  such  canal  the  following  «rules,  substantially  as  embodied  in  the  convention 
of  Constantinople,  signed  the  28th  October,  1888,  for  the  free  navigation  of 
the  Suez  Canal:  (1)  The  canal  shall  be  free  and  open  to  the  vessels  of  com- 
merce and  of  war  of  all  nations  observing  these  rules  on  terms  of  entire 
equality,  so  that  there  shall  be  no  discrimination  against  any  such  nation  or 
its  citizens  or  subjects  in  respect  of  the  conditions  or  charges  of  traffic  or  other- 
wise; such  conditions  and  charges  of  traffic  shall  be  just  and  equitable.  (2) 
The  United  States  is  to  be  at  liberty  to  maintain  military  police  for  the  pro- 
tection of  the  canal.  (3)  Provisions  are  added  regarding  the  A'essels  of  war 
of  a  belligerent.  (4)  No  belligerent  shall  embark  or  disembark  troops.  (5) 
Waters  adjacent  or  within  3  military  miles  of  the  canal  shall  be  regarded 
as  within  its  ambit.  (6)  The  plant,  etc.,  part  of  the  canal  shall  enjoy  immu- 
nity. Article  4  provides  that  no  change  of  territorial  sovereignty  or  of  inter- 
national relations  of  the  country  or  countries  traversed  by  the  canal  shall  affect 
the  general  principle  of  neutralization. 

The  "  general  principle  of  neutralization  "  established  by  the  Clayton-Bulwer 
treaty  has  been  found  to  be  the  maintenance  of  the  status  quo  of  the  condi- 
tions of  commercial  rivalry.  The  essence  of  the  difference  between  the  treaty 
of  1850  and  the  treaty  of  1901  is  to  be  found  in  the  fact  that,  following  out 
the  analogy  hazarded  above,  it  is  no  longer  an  instance  of  a  combination  of 
shipowners  regarding  a  private  canal  undertaking,  but  an  agreement  between 
two  individual  shii>owners  that  one  of  them  shall  construct  the  canal  and 
maintain  the  existing  conditions  of  commercial  rivalry  without  detriment  to 
the  other  or  to  other  shipowners,  even  though  not  parties  to  the  contract,  for 
the  time  being  making  use  of  the  canal,  and  consequently  observing  the  above 
rules. 

It  can  scarcely  be  said  that  the  wording  of  the  Hay-Pauncefote  treaty  is 
happy.  The  unfortunate  incorporation  in  the  preamble  of  the  provisions  of 
95272—12090 


95 

the  Suez  Canal  convention  is  an  instance  of  the  evil  of  the  process  of  legisla- 
tion by  reference.  The  scheme  of  that  convention  has  reference  to  an  agree- 
ment between  parties  in  the  nature  of  sovereign  States  external  to  the  actual 
ownership  and  control  of  a  canal  owned  by  a  commercial  company,  whereas 
the  Hay-Pauncefote  treaty  implies  the  plan  of  a  State-owned  undertaking. 

The  present  controversy  has  been  too  much  the  subject  of  recent  controversy 
to  make  it  necessary  to  set  forth  the  exact  words  of  the  actual  provision  of 
the  Legislature  of  the  United  States  which  are  said  to  violate  international 
agreement.  Shortly,  the  main  ground  of  objection  is  to  the  proposal  to  grant 
immunity  from  tolls  to  the  coasting  vessels  of  United  States  nationality  pass- 
ing through  the  canal. 

It  seems  clear  that  one  attractive  argument  used  by  those  who  take  ex- 
ception to  the  action  of  the  United.  States  must  be  ruled  out.  It  is  sought 
to  be  said  that  by  reason  of  the  concession  to  unduly  favored  vessels  the 
expense  of  the  undertaking  must  of  necessity  be  borne  in  a  larger  proportion 
by  the  vessels  using  the  canal.  This  is  upon  the  assumption  that  the  canal 
dues  paid  by  vessels  passing  through  in  any  one  year  are  at  least  in  their 
totality  to  amount  to  a  sum  representing  the  whole  annual  burden,  including 
repayment  of  capital  construction  expenditure  by  means  of  a  sinking  fund, 
as  well  as  the  actual  expenses  of  maintaining  and  working  the  canal.  It  is 
of  course  possible  that  the  canal  dues  to  be  levied  are  to  be  calculated  on 
this  basis,  but  there  is  no  treaty  obligation  on  the  part  of  any  international 
parties  that  the  canal  shall  be  in  the  nature  of  a  self-paying  concern.  So  long 
as  the  canal  dues  fall  within  the  condition  of  the  Hay-Pauncefote  treaty  that 
they  are  to  be  "  just  and  equitable,"  it  seems  that  the  United  States  may  elect 
to  treat  the  canal  as  a  losing  or  as  a  profit-making  commercial  speculation. 

The  Panama  Canal,  however,  will  have  cost  in  construction  some  £80,000,000, 
and  this  sum,  with  its  consequent  annual  burden  increased  by  all  the  liabilities 
of  maintenance,  working,  police,  and  protection,  is  wholly  a  charge  falling  upon 
the  finances  of  the  United  States. 

Granted  that  the  highest  tolls  commercially  possible  are  levied  upon  ships 
passing  through  the  canal,  it  is  not  reasonably  probable  that  the  undertaking 
will  be  other  than  a  losing  one  from  the  point  of  view  of  administrative  profit 
and  loss.  The  real  question,  therefore,  is  whether  there  is  any  interference  with 
the  "  general  principle  of  neutralization,"  which  involves  an  infringement  of 
existing  conditions  of  commercial  rivalry. 

It  must  be  conceded  that  direct  competition  upon  an  unfavorable  basis  can 
not  arise.  The  nationals  of  no  State  other  than  those  of  the  United  States 
can  own  vessels  employed  in  the  coasting  trade  of  the  United  States.  Naturally 
this  does  not  conclude  the  question,  because  an  extension  of  the  coasting  trade 
might  conceivably  be  detrimental  to  ocean-borne  traffic.  Is  such  an  interference 
with  the  conditions  of  commercial  rivalry  forbidden  by  convention? 

Now,  the  rules  to  be  applied  to  the  interpretation  of  treaties,  as  laid  down 
by  William  Edward  Hall  (Int.  Law,  5th  ed.,  p.  335),  are  few  and  clear.  They 
must  be  construed  according  to  the  plain  and  reasonable  sense  to  be  attached 
to  the  ordinary  meaning  of  words ;  when  terms  used  in  a  treaty  have  a  different 
legal  sense  within  the  two  contracting  States,  they  are  to  be  understood  in 
the  sense  which  is  proper  to  them  within  the  State  to  which  the  conditions 
containing  them  applies;  when  the  words  of  a  treaty  fail  to  yield  a  plain  and 
reasonable  sense  by  recourse  to  the  general  sense  and  spirit  of  the  treaty  as 
shown  by  the  context  or  by  the  provisions  of  the  instrument  as  a  whole,  or  by 
taking  a  reasonable  instead  of  a  literal  sense  of  the  words.  No  treaty,  again, 
can  be  taken  to  restrict  by  implication  the  exercise  of  rights  of  sovereignty  or 
property  or  self-preservation  whilst  whatever  may  be  necessary  to  the  enjoy- 
ment of  things  granted  by  it  is  understood  to  be  tacitly  given  or  imposed  by 
the  gift  or  imix>sition  of  that  upon  which  it  is  attendant. 

The  question,  therefore,  must  be  solved  in  one  of  three  ways — 

(1)  By  the  precise  words  of  the  particular  provisions  of  the  Hay-Pauncefote 
treaty ; 

(2)  By  the  context  and  preamble  of  that  treaty;  or 

(3)  By  what  may  be  termed  natural  justice. 

It  will  scarcely  be  contended  that  natural  justice,  unfettered  by  documentary 
construction,  would  refuse  to  the  United  States  the  privilege  of  the  limited 
discrimination  incorporated  in  the  bill. 

95272—12090 


96 

The  following  considerations  may  be  briefly  noted: 

(a)  The   importance  to   the   United    States   of  the   encouragement   of   their 
coasting  trade  compared  with  its  relative  unimportance  to  other  States  using 
the  canal.     Compare  the  percentage  of  ocean-borne  goods  carried  by  American 
ships  in   the  year  of  the  Clayton-Bulwer  treaty  with  that  appearing  in   the 
Navigation  Report  for  the  year  preceding  the  Hay-Pauncefote  convention  and  it 
will  be  found  to  have  declined  from  75.2  per  cent  to  9.3;  that  is  to  say,  a  reduc- 
tion of  from  nearly  four-fifths  to  under  one-tenth.    Compare,  on  the  other  hand, 
the  increased  statistics  during  the  same  period  of  the  coasting  trade,  and  the 
trend  is  precisely  in  the  opposite  direction. 

(b)  The  responsibility  cast   upon   the   United   States  not  only   in   the  con- 
struction and  management,  but  also  in  the  maintenance  and  protection  of  the 
canal. 

(c)  The  risks,  whatever  they  may  be,  inherent  to  every  commercial  under- 
taking, and  essentially  to  such  an  enterprise — risks  which  deterred  all  comers 
to  such  an  extent  that  the  canal  has  only  been  brought  into  concrete  being  after 
the  delay  or  failure  of  50  years. 

(d)  The  absence  of   any    guaranty    of   monopoly   of   traffic    across    Central 
America,  because  conceivably  canals  and  probably  other  means  of  communica- 
tion— e.  g.,  railway  facilities — may  be  brought  into  active  competition. 

(c)  There  is  no  international  convention  of  recognition  of  neutrality,  except 
by  Great  Britain,  and  no  guaranty  of  the  maintenance  of  neutrality  by  any 
State  whatever.  Even  the  provision  for  the  neutrality  of  alternative  routes  con- 
tained in  the  Clayton-Bulwer  treaty  has  possibly  been  superseded. 

(f)  If  there  be  by  implication  a  guaranty  on  the  part  of  Great  Britain  not 
to  encourage  or  discourage  the  use  of  the  canal  by  any  system  of  bounty, 
subsidy,  or  the  like,  there  is  no  obligation  upon  any  other  State,  save  that  of 
observing  the  rules  elaborated  in  the  Hay-Pauncefote  treaty  during  the  actual 
user  of  the  canal. 

The  case  against  the  United  States  must  therefore  be  based  upon  the  strict 
construction  of  the  precise  words  of  the  treaty,  adopting  the  language  of  Lord 
Clarendon  in  the  construction  of  the  Clayton-Bulwer  treaty  in  the  case  of  the 
"  Mosquito  Indians,"  alleging  that  "  the  true  construction  of  a  treaty  must  be 
deduced  from  the  literal  meaning  of  the  words  employed  in  the  framing." 

It  is  necessary  for  the  opponents  of  the  United  States  to  contend  that  the 
expression  "  free  and  open  to  the  vessels  *  *  *  of  all  nations  observing 
these  rules "  implies  "  including  the  nation  owning  and  administering  the 
canal,"  and  that  the  expression  "  no  discrimination  against  any  such  nation  "— 
i  e.,  "  observing  these  rules  " — implies  "  or  in  favor  of  the  nation  which  enforces 
these  rules."  It  seems  that  this  would  be  a  strained,  though  perfectly  pos- 
sible, construction.  But  it  is  scarcely  a  construction  of  "  literal  meaning." 
N.ay,  more,  having  regard  to  the  obvious  intention  to  deal  with  the  position 
of  States  external  to  the  convention,  and  not  even  intended  to  signify  their 
adherence  thereto,  it  is  submitted  that  such  a  construction  is  the  necessary  or 
even  the  reasonable  one. 

Equally  it  would  appear  that  recourse  to  context  and  preamble  would  enable 
the  United  States,  having  regard  to  the  "general  sense  and  spirit,"  to  suc- 
ceed. There  is  no  contractual  undertaking  by  any  States  outside  the  United 
States  on  the  one  hand,  and  Great  Britain  on  the  other.  There  is  no  pro- 
vision analogous  to  that  contained  in  the  Clayton-Bulwer  treaty  providing  for 
the  adherence  to  the  convention  of  any  third  State.  The  whole  of  the  ad- 
vantages are  to  be  enjoyed  by  any  State  for  the  time  being  accepting  the  con- 
ditions of  working,  without  any  obligation  on  the  part  of  any  State  to  remain 
bound  to  such  conditions  further  than  during  periods  which  may  be  of  inter- 
mittent user.  Even  between  the  actual  contracting  parties,  Great  Britain 
and  the  United  States,  there  are  no  collateral  or  reciprocal  obligations  by  way 
of  consideration  explicitly  undertaken.  Any  State  for  the  time  being  using 
the  canal,  and  so  assenting  to  be  bound  by  the  conditions,  can,  by  bounty  to 
its  own  vessels  or  in  any  other  way  not  amounting  to  a  breach  of  international 
obligations,  differentiate  in  favor  of  its  own  vessels  and  against  those  of  any 
other  State,  including  the  United  States. 

To  sum  up,  it  is  reasonably  arguable — 

(a)   That  the  United  States  can  support  its  action  on  the  precise  words  of 
the  material  articles  of  the  treaty;  that  its  case  is  strengthened  by  reference 
to  the  preamble  and  context,  and  that  its  case  is  difficult  to  challenge  on  grounds 
of  general  justice; 
95272—12090 


97 

(b)  That  there  is  uo  international  obligation  to  submit  the  construction  of 
its  legislative  act  to  any  process  of  arbitration;  and 

(c)  That  any  aggrieved  party  has  an  appropriate,  an  impartial,  and  a  com- 
petent tribunal  in  the  Supreme  Court  of  the  United  States. 

II.    The  Panama  Canal  Act. 

(By  C.  A.  Hereshoff  Bartlett,  LL.  B.) 

The  Eepublic  of  Panama  comprises  some  40,000  square  miles  and  has  a  popu- 
lation of  about  300.000.  On  November  18,  1903,  a  treaty  was  signed  between 
the  Republic  and  the  United  States  whereby  the  Republic  of  Panama  granted 
to  the  United  States  in  perpetuity  the  use,  occupation,  and  control  of  a  zone 
of  laud  and  land  under  water  for  the  construction,  maintenance,  operation, 
sanitation,  and  protection  of  a  canal  of  the  width  of  10  miles.  5  miles  on  both 
sides  of  the  center  thereof,  and  extending  into  the  Pacific  Ocean  and  Caribbean 
Sea  3  miles  from  low  water.  By  this  treaty  the  Republic  of  Panama  granted 
to  the  United  States  all  the  rights,  power,  and  authority  of  a  sovereign.  The 
grant  was  a  grant  of  land  and  sovereign  rights  thereover  and  not  a  mere  con- 
cession or  privilege.  The  Panama  Canal  Zone  is  a  territory  appurtenant  and 
belonging  to  the  United  States.  This  zone  is  as  much  and  as  exclusively  the 
property  of  the  United  States  as  are  the  rivers  and  Territory  of  Alaska,  and  is 
subject  to  such  laws  as  the  Congress  of  the  United  States  may  make  respect- 
ing it;  and,  when  made,  such  laws  become  the  sole  and  only  rule  of  action 
within  the  territory,  even  superseding  the  provisions  of  a  treaty  in  conflict 
therewith.  Congress  has  plenary  power  under  the  Constitution  of  the  United 
States  over  its  Territories,  and  its  power  to  deal  with  trade  or  commerce  in 
the  Territories  does  not  depend  upon  the  authority  of  the  interstate-commerce 
clause  of  the  Constitution;  and  this  plenary  power  gives  to  Congress  the  un- 
doubted right  to  pass  laws  and  make  uniform  regulations  governing  the  use  of 
its  appurtenant  territory. 

In  conformity  with  this  power  Congress  in  August  last  passed  an  act  to  pro- 
vide for  the  opening,  maintenance,  protection,  and  operation  of  the  Panama 
Canal  and  the  sanitation  and  government  of  the  Canal  Zone,  by  section  5  of 
which  it  is  provided  that  no  tolls  shall  be  levied  upon  vessels  engaged  in  the 
coastwise  trade  of  the  United  States.  After  the  passage  of  this  act  the 
British  Government  filed  a  protest  thereto,  alleging  that  the  act  of  Congress  was 
in  violation  of  the  Hay-Pauncefote  treaty — 

(a)  Because  it  vests  the  President  with  discretion  to  discriminate  in  fixing 
toils  in  favor  of  American  ships  and  against  foreign  ships  engaged  in  foreign 
trade,  although  there  is  nothing  in  the  act  to  compel  the  President  to  make  such 
a  discrimination. 

(b)  Because  it  discriminates  in  favor  of  the  coastwise  trade  of  the  United 
States  by  providing  that  no  tolls  shall  be  charged  on  vessels  engaged  in  that 
trade  passing  through  the  canal. 

The  passage  of  this  act  and  the  affixing  of  his  signature  thereto  by  the  Presi- 
dent has  raised  such  diversity  of  opinion  both  at  home  and  abroad  as  to  whether 
it  is  or  is  not  in  conflict  with  the  Hay-Pauncefote  treaty  that  it  becomes  proper 
to  review  this  subject  from  an  impartial  and  unprejudiced  point  of"  view, 
entirely  aside  from  any  question  of  nationality  or  politics. 

The  provision  of  the  Hay-Pauncefote  treaty  involved  is  one  of  the  rules 
adopted  by  the  United  States  as  the  basis  of  the  neutralization  of  the  canal,  and 
is  as  follows : 

1.  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
observing  these  rules  on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimina- 
tion against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions  or 
charges  of  traffic  or  otherwise.  Such  conditions  and  charges  of  traffic  shall  be  just  and 
equitable. 

It  is  a  well -recognized  principle  that,  like  other  contracts,  treaties  are  to  be 
read  in  the  light  of  the  conditions  and  circumstances  existing  at  the  time  they 
were  entered  into,  with  a  view  to  efi'eoting  the  objects  and  purposes  of  the  States 
thereby  contracting.  It  becomes  necessary,  therefore,  to  ascertain  what  were 
the  conditions  and  circumstances  existing  at  the  time  when  the  Hay-Pauncefote 
treaty  was  concluded. 

The  Hay-Pauncefote  treaty,  in  mentioning  vessels  of  commerce  of  all  nations, 
never  contemplated  such  an  eventuality  as  the  United  States  becoming  the  owner 
95272'— 12090 7 


98 

of  the  land  covered  by  the  waters  of  the  canal  and  exercising  sole  and  sovereign 
power  thereover,  and  consequently  it  can  not  be  held  by  any  just  construction 
to  apply  to  conditions  and  circumstances  so  completely  beyond  the  intention  and 
design  of  the  treaty.  At  that  time  the  possibility  of  the  United  States  con- 
structing an  isthmian  canal  through  its  own  territory  was  never  contemplated. 
No  such  contingency  was  thought  of;  it  was  loo  remote  even  for  the  mind  of 
the  most  imaginative  concessionaire  of  an  interoceanic  waterway.  The  situation 
regarding  the  building  of  any  canal  was  full  of  complications  and  almost  super- 
human difficulties,  while  the  rights  to  construct  an  interocean  canal  by  the 
various  routes  were  covered  by  a  confused  network  of  concessions — to  say  noth- 
ing of  treaties — giving  individuals  and  companies  vested  rights  that  could  not 
be  disregarded.  The  contracting  parties  to  the  Hay-Pauncefote  treaty  had  in 
mind  the  construction  of  a  canal  under  the  auspices  of  the  United  States,  which 
means  nothing  more  than  under  its  influence,  patronage,  care,  and  protection. 
The  building  of  a  canal  through  the  Isthmus  of  Panama  was  then  as  far  from 
completion  as  it  was  when  the  first  French  company  failed  after  expending  some 
$100,000,000  in  the  work,  while  the  advocates  of  the  Nicaragua  Canal  were  as 
confident  as  ever  that  their  route  was  the  only  feasible  one.  So  little  did  anyone 
think  of  the  United  States  actually  acquiring  the  Panama  Canal  Zone  or  build- 
ing the  canal  on  its  own  account  that  even  when  the  representatives  of  the  New 
French  Co.  and  the  Nicaragua  company  appeared  before  the  Senate  investigat- 
ing committee  they  expressly  declared  they  had  all  the  money  needed  and 
were  not  seeking  financial  aid  from  the  Government. 

Such  briefly  were  some  of  the  conditions  and  circumstances  existing  when  the 
Hay-Pauncefote  treaty  was  concluded,  but  they  were  not  the  same  as  those 
existing  in  August,  1912,  when  the  Panama  Canal  bill  was  passed  by  Congress. 
A  revolution  not  only  of  a  State  but  in  the  entire  situation  and  phase  of  an 
interocean  canal  had  taken  place,  and  instead  of  an  indifferent  onlooker  or 
guardian  of  neutrality  the  United  States  had  become  itself  the  indisputable 
owner  and  sovereign  of  the  soil  through  which  this  great  waterway  is  being 
built  at  a  cost  of  £80,000,000,  and  not  by  capital  subscribed  in  Europe,  but  by 
funds  provided  by  the  United  States  alone,  not  private  funds,  but  public  money 
derived  by  public  taxation  for  public  purposes. 

Having  referred  to  the  existing  conditions  and  circumstances  as  they  were  in 
1901  and  1912,  we  will  now  consider  the  terms  of  the  Hay-Pauncefote  treaty 
regarding  "  vessels  of  commerce  and  of  war  of  all  nations." 

The  provision  of  the  treaty  referred  to  means  that  there  shall  be  no  dis- 
crimination by  the  United  States  against  any  one  foreign  nation,  or  its  citizens 
or  subjects,  in  favor  of  any  other  foreign  nation,  or  its  citizens  or  subjects,  in 
respect  of  the  conditions  of  or  charges  for  traffic  or  otherwise.  "  On  terms  of 
entire  equality"  refers  to  the  equality  extended  to  all  nations  other  than  the 
United  States;  that  is  to  say,  it  is  prohibitive  of  the  United  States  favoring 
one  foreign  nation  as  against  another.  Its  purpose  was  to  provide  that  vessels 
of  commerce  of  all  nations  foreign  to  the  United  States  should  enjoy  the  same 
equality  among  themselves;  but  this  is  quite  another  thing  from  saying  that 
vessels  of  commerce  of  foreign  nations  shall  enjoy  the  same  equality  as  the 
vessels  of  commerce  of  the  United  States,  and  that  the  Federal  Government 
can  not,  without  infringing  the  terms  of  the  treaty,  extend  the  free  use  of  the 
canal  even  to  its  own  vessels  engaged  in  the  coastwise  trade.  What  else  does 
the  expression  "  there  shall  be  no  discrimination  against  any  such  nation " 
mean?  It  means  that  no  attempt  should  be  made  by  the  Federal  Government 
to  promote  the  interests  of  one  foreign  power  to  the  detriment  or  exclusion  of 
another;  that  all  foreign  nations  should  stand  together  equal  and  alike  in  the 
use  of  the  canal. 

"  On  terms  of  entire  equality  "  was  intended  to  prevent  the  United  States 
discriminating  in  favor  of  one  foreign  nation  against  another  foreign  nation. 
The  Federal  Government  was  laying  down  its  own  rules,  not  for  the  regulation 
of  its  own  ships  of  war  and  of  commerce,  but  for  the  ships  of  war  arid  of 
commerce  of  the  stranger  beyond  its  ports,  and  it  unhesitatingly  declared  that 
the  canal  that  might  be  built  under  its  auspices  should  be  free  and  open  to  them 
on  terms  of  entire  equality.  No  advantage  should  be  obtained  by  one  foreign 
nation  over  another  foreign  nation ;  there  should  be  no  favoritism,  no  special 
benefit  or  privilege  extended  to  one  that  should  not  be  open  alike  to  all  foreign 
nations.  This  is  what  the  provision  means  and  nothing  more.  It  would  require 
the  interpolation  of  terms  not  contained  in  the  treaty  itself  to  sustain  any  other 
construction. 

95272—12090 


99 

Tiiere  is  no  invidious  discrimination  against  any  one  foreign  nation  under  the 
Panama  Canal  act.  All  foreign  nations  engaged  in  the  same  commerce — over- 
seas trade — are  treated  alike;  are  subject  to  the  same  restrictions  and  are 
entitled  to  the  same  privileges  under  similar  conditions.  On  general  principles 
treaties  as  well  as  legislation  discriminating  against  some  and  favoring  others 
are  objectionable;  but  treaties  and  legislation  which  in  carrying  out  a  public 
purpose  are  limited  in  their  application — if  within  the  sphere  of  their  operation 
ihey  affect  alike  all  persons  or  objects  similarly  situated — are  not  unjust  dis- 
crimination. 

Specific  regulations  of  one  kind  of  commerce  which  may  be  necessary  for  its 
protection  can  never  be  the  just  ground  of  complaint  because  like  regulations 
are  not  imposed  upon  commerce  of  a  different  kind.  The  discriminations  which 
are  open  to  objection  are  those  where  persons  engaged  in  the  same  commerce 
and  plying  their  trade  under  the  same  conditions  enjoy  different  privileges.  It 
is  only  then  that  the  discrimination  can  be  said  to  impair  that  equal  right 
which  all  can  claim  to  whom  it  is  accorded  by  law. 

There  is  no  evasion  of  the  rule  of  equality  where  all  foreign  vessels  are. sub- 
jected to  the  same  duties  and  liability  under  similar  circumstances. 

The  treaty  could  never  have  been  intended  to  prevent  the  Federal  Government 
from  arranging  and  regulating  its  domestic  or  coastwise  commerce,  and  in  the 
use  and  enjoyment  of  its  own  property  as  it  saw  fit. 

No  such  restriction  could  have  been  in  view  in  adopting  "  as  the  basis  of  neu- 
tralization "  a  rule  that  the  canal  should  be  free  and  open  to  the  vessels  of  com- 
merce and  of  war  of  all  nations  on  terms  of  entire  equality.  It  would  be  absurd 
for  the  United  States  to  solemnly  declare  that  its  own  vessels  of  war  might 
openly  and  freely  navigate  its  own  landlocked  waterways  and  enjoy  the  privi- 
leges that  belong  to  the  Nation  as  a  sovereign  power  in  the  use  of  its  own 
territory.  The  use  of  the  words  "  vessels  of  war  "  shows  plainly  that  the  word 
"  vessels  "  as  used  referred  only  and  exclusively  to  those  of  all  nations  other 
than  those  of  the  United  States,  and  that  the  word  '"  nations"  was  restricted 
to  foreign  nations;  that  is  to  say,  nations  foreign  to  the  United  States.  What 
the  opponents  of  the  canal  act  seek  to  accomplish  is  to  add  to  this  phrase  after 
the  word  "  equality  "  the  words  "  with  its  own,"  so  that  it  would  read  "  on 
terms  of  entire  equality  with  its  own."  But  that  is  precisely  what  was  not 
contemplated  and  what  was  never  within  the  minds  of  the  contracting  parties. 
The  United  States  was  not  adopting  a  rule  for  the  use  of  its  own  canal — its  own 
enterprise  and  work  achieved  at  the  cost  of  its  own  national  treasure — but  was 
simply  laying  down  a  rule  for  the  equal  treatment  alike  of  all  foreign  vessels  in 
a  ship  canal  that  might  be  built  beyond  its  territory,  but  under  its  supervision 
and  direction.  That  is  to  say,  it  was  not  laying  down  rules  to  regulate  its  own 
conduct  in  the  beneficial  use  and  enjoyment  of  its  own  property,  or  abandoning 
what  one  day  might  belong  to  the  Nation  just  as  much  as  Porto  Rico  or  the 
Philippines.  No  such  relinquishment  by  the  Federal  Government  was  ever 
within  the  contemplation  of  those  who  negotiated  the  treaty. 

It  is  inconceivable  that  the  United  States,  when  it  agreed  in  the  treaty  that 
the  canal  should  be  free  and  open  to  the  vessels  of  commerce  of  all  nations,  in- 
tended to  recognize  or  to  feel  itself  bound  to  recognize  on  terms  of  entire 
equality  foreign  vessels  of  commerce  with  those  of  its  own,  engaged  in  domestic 
or  coastwise  trade,  or  to  so  restrict  its  sovereign  authority  over  its  own  com- 
merce that  it  could  not  consistently  with  the  treaty  abolish  tolls  on  its  own 
shipping  that  might  be  entirely  foreign  to  the  conceptions  of  the  American  peo- 
ple and  inconsistent  with  their  commercial  interests. 

The  Hay-Panncefote  treaty  not  only  referred  to  vessels  of  foreign  nations 
eng.-iged  in  foreign  trade,  but  it  excluded  those  engaged  in  the  coastwise  trade. 
The  contracting  parties  did  not  have  these  in  mind  in  framing  the  treaty.  The 
disputed  provision  refers  to  perfect  equality,  and  therefore  must  necessarily 
include  only  those  vessels  capable  of  falling  within  this  term ;  and  the  only 
vessels  of  commerce  that  were  then,  are  now,  or  ever  have  been  treated  on  the 
same  terms  of  equality  under  the  usage  of  nations  are  vessels  of  commerce  en- 
gaged in  foreign  trade.  Vessels  of  commerce  following  the  coastwise  trade 
have  never  been  placed  on  an  equality  with  those  engaged  in  commerce  with 
foreign  nations,  nor  could  they  be  without  violating  national  laws  or  the  in- 
herent right  of  a  nation  to  control  its  domestic  shipping.  There  is  a  well- 
defined  distinction  between  vessels  engaged  in  foreign  commerce  and  the  local 
coastwise  vessel  sailing  under  its  own  nation's  flag  between  home  ports.  Coast- 
wise vessels  ply  their  trade  under  different  conditions  from  those  engaged  in 
95272 — 12090 


100 

foreign  commerce.  They  form  a  separate  and  distinct  class;  they  are  governed 
by  different  laws;  they  are  subjected  in  their  own  ports  to  lesser  duties  and 
charges  or  to  none  at  all ;  and  they  are  jealously  protected  by  their  own  govern- 
ment which,  invariably  by  one  means  or  another,  discriminates  in  their  favor. 

Congress  has  always  adhered  to  the  policy  of  restricting  domestic  commerce — 
that  is,  vessels  trading  from  one  port  in  the  United  States  to  another  port  in 
the  United  States — to  American  vessels  owned  and  navigated  by  American 
citizens.  There  is  nothing  special  and  peculiar  in  this  legislation.  It  is  in 
harmony  with  the  policy,  not  only  of  the  United  States,  but  of  every  sea-bound 
nation,  to  encourage  and  protect  under  special  privileges  its  domestic  maritime 
trade.  The  same  system  has  been  observed  by  the  treaty-making  power  of  the 
Government,  which  was  frequently  given  emphasis  to  the  doctrine  by  express 
reservations  in  treaties. 

In  1851  the  United  States  concluded  a  treaty  of  friendship,  commerce,  and 
navigation  with  the  Republic  of  Costa  Rica,  which  contained  the  following 
article : 

No'higher  nor  other  duties  or  payments  on  account  of  tonnage,  of  light  or  harbor  dues, 
of  pilotage,  of  salvage  in  case  either  of  damage  or  shipwreck,  or  on  account  of  any  other 
local  charges,  shall  be  imposed  in  any  of  the  ports  of  the  Republic  of  Costa  Rica  on 
vessels  of  the  United  States  than  those  payable  in  the  same  ports  by  Costa  Rican  vessels, 
nor  in  any  of  the  ports  of  the  United  States  on  Costa  Rican  vessels  than  shall  be  payable 
in  the  saine  ports  on  vessels  of  the  United  States. 

Nothing  could  be  more  comprehensive  than  this  article,  and  standing  alone  it 
would  be  inferred  as  including  vessels  of  every  sort,  both  those  following  the 
over-seas  commerce  and  those  domestic  vessels  sailing  only  between  home  ports ; 
and  yet  this  treaty  contained  a  clause  declaring  that  the  reciprocal  freedom  of 
commerce  intended  should  not  apply  to  the  coasting  trade. 

The  treaty  of  friendship,  commerce,  and  navigation  between  the  United  States 
and  Denmark,  of  1826,  said : 

Nor  shall  higher  or  other  charges  of  any  kind  be  imposed  in  the  ports  of  one  party  on 
vessels  of  the  other  than  are  or  shall  be  payable  in  the  same  ports  by  native  vessels. 

But  this  treaty  also  excepted  the  coasting  trade. 

In  1887  the  United  States  made  a  treaty  with  the  Republic  of  Peru  for  the 
reciprocal  liberty  of  commerce  and  navigation  between  their  respective  terri- 
tories, which  provides  as  follows: 

No  higher  or  other  duties  or  charges  on  account  of  tonnage,  lighthouses  or  harbor 
dues,  pilotage,  quarantine,  salvage  in  case  of  damage  or  shipwreck,  or  any  other  local 
charges,  shall  be  imposed  in  any  ports  of  Peru  on  vessels  of  the  United  States  than  those 
payable  in  the  same  ports  by  Peruvian  vessels,  nor  in  any  of  the  ports  of  the  United 
States  on  Peruvian  vessels  than  shall  be  payable  in  the  same  ports  by  vessels  of  the 
United  States.  *  *  *  It  is  hereby  declared  that  the  stipulations  of  the  present 
treaty  are  not  understood  as  applying  to  the  navigation  and  coasting  trade  between  one 
port  and  another  situated  in  the  territories  of  either  contracting  party,  the  regulation  of 
such  navigation  and  trade  being  reserved,  respectively,  by  the  parties  according  to  their 
own  separate  laws. 

Like  provisions  are  contained  in  many  other  treaties,  which  illustrate  the 
universally  prevailing  custom  among  nations  to  distinguish  between  the  vessels 
of  a  nation  and  the  vessels  of  a  nation  engaged  in  the  coasting  trade.  The 
terms  "  vessels  of  a  nation,"  or  even  "  vessels,"  as  used  in  treaties,  have  re- 
ceived among  commercial  countries  their  own  interpretation  by  long-continued 
custom  and  acquiescence,  and  are  universally  accepted  as  not  embracing  vessels 
other  than  those  plying  between  one  foreign  country  and  another,  so  that  in  the 
negotiation  of  treaties  the  high  contracting  parties  have  never  had  in  contem- 
plation coastwise  vessels  in  laying  down  rules  for  equality  of  treatment  of  the 
vessels  of  their  respective  countries. 

In  addition  to  the  3  treaties  above  mentioned,  28  other  treaties  of  commerce 
and  navigation  were  concluded  between  the  United  States  and  foreign  countries 
between  the  years  1825  and  1887,  which  expressly  excepted  their  respective 
coastwise  trade. 

England  has  always  carried  out  the  same  policy  as  that  of  the  United  States 
with  reference  to  her  coastwise  vessels,  either  by  safeguarding  her  home  trade 
diplomatically  in  express  exemptions  in  treaties  or  by  subjecting  her  coastwise 
vessels  to  other  and  different  dues  and  charges  from  vessels  engaged  in  the 
over-seas  trade,  thus  practically  discriminating  in  favor  of  her  own  domestic 
marine. 

In  principle  the  two  things  are  the  same,  the  result  being  that  the  stranger 
coming  from  over  the  seas,  in  spite  of  all  the  pretense  of  uniformity,  mutuality, 
95272—12090 


101 

and  equality  of  treatment,  has  to  pay  larger  and  heavier  port  dues  than  the 
British  coastwise  vessel,  and  this  is  the  practice  at  British  ports  to-day,  as  it 
has  always  been,  even  in  spite  of  the  most  formal  treat;/  st&i^lttpas  to  the  eon- 
tniry.  While  to-day  England's  coastwise  trade  is  open  to-ships  of  -other  nations, 
yet  "this  was  not  always  so,  for  at  one  time  it  w?,s  provided-  Jby .  lav/,  that  no 
goods  or  passengers  should  be  carried  coastward  from  ^QG  port  of  jui^  d|tflfeaL; 
Kingdom  to  another  except  in  British  ships,  the  same  act  defining  what  the 
coastwise  trade  was,  and  as  late  as  in  1870  it  was  provided  by  act  of  Parliament 
that  no  goods  or  passengers  should  be  carried  by  water  from  one  port  of  Canada 
to  another  except  in  British  ships.  The  whole  history  of  English  diplomacy 
has  been  uniform  with  that  of  the  United  States  and  other  commercial  coun- 
tries, either  in  specifically  exempting  coastwise  trade  from  its  conventions  and 
treaties,  or  by  doing  so  in  establishing  different  and  other  duties  and  charges 
for  her  coastwise  marine  than  those  imposed  at  the  same  port  on  vessels 
engaged  in  the  over-seas  trade. 

It  is  not  everyone  who,  looking  at  the  map  of  the  United  States  and  seeing 
the  broad  extent  of  territory  the  State  of  Texas  covers,  realizes  that  it  was 
only  after  one  of  the  most  bloody  wars  on  record  that  the  Texans  were  able  in 
1836  to  secure  their  independence  and  declare  themselves  a  Republic.  While 
the  political  life  of  the  Republic  of  Texas  only  continued  for  nine  years  before 
it  became  one  of  the  States  of  the  Federal  Union,  yet  the  principal  act  in  its 
diplomatic  history  consisted  in  negotiating  a  treaty  with  England  in  which  both 
countries  specifically  reserved  their  coasting  trade  to  their  national  vessels.  On 
November  13,  1840,  Great  Britain  and  the  Republic  of  Texas,  being  equally 
desirous  of  affording  every  facility  and  encouragement  to  their  respective  sub- 
jects and  citizens  engaged  in  commercial  intercourse  with  each  other,  concluded 
a  treaty  of  commerce  and  navigation,  signed  by  Viscount  Palmerston  and  Gen. 
James  Hamilton,  which  contained  the  following  provision : 

IV.  The  stipulations  of  the  present  treaty  shall  not  be  considered  as  applying  to  the 
navigation  and  carrying  trade  between  one  port  and  another  situated  in  the  dominions  of 
one  contracting  party  by  the  vessels  of  the  other,  as  far  as  regards  passengers,  com- 
modities, and  articles  of  commerce,  such  navigation  and  transport  being  reserved  by  each 
contracting  party  to  national  vessels. 

Xo  country  was  more  jealous  of  the  foreigner  indulging  in  her  coastwise  trade 
than  was  England  when  she  opened  her  ports  in  the  East  Indies  to  American 
vessels.  By  the  treaty  of  amity,  commerce,  and  navigation  between  Great 
Britain  and  the  United  States  of  1794  England  consented  that  American  vessels 
be  admitted  and  hospitably  received  at  all  the  seaports  and  harbors  of  the  Brit- 
ish territories  in  the  East  Indies  and  that  American  citizens  be  allowed  to 
carry  on  a  trade  between  them  and  the  United  States,  such  American  vessels 
paying  no  other  or  higher  tonnage  duty  than  should  be  payable  on  British  ves- 
sels when  admitted  into  the  ports  of  the  United  States.  The  treaty  provides, 
however,  "  that  the  permission  granted  by  this  article  is  not  to  extend  to  allow 
the  vessels  of  the  United  States  to  carry  on  any  part  of  the  coasting  trade  of 
said  British  territories." 

This  treaty  was  followed  by  the  convention  of  1815,  to  regulate  commerce  and 
navigation,  which  specifically  mentioned  the  ports  of  Calcutta,  Madras,  and 
Bombay,  in  the  British  East  Indies,  as  being  open  to  American  vessels,  it  being 
expressly  understood,  however,  "  that  the  permission  granted  by  this  article  is 
not  to  extend  to  allow  the  vessels  of  the  United  States  to  carry  on  any  part  of 
the  coasting  trade  of  the  said  British  territories." 

It  will  be  noticed  that  the  clauses  in  these  treaties  are  similar  to  those  con- 
tained in  the  various  treaties  made  by  the  United  States  with  other  countries 
quoted  above,  and  it  becomes  significant  when  we  find  the  same  provisions  scrup- 
ulously inserted  by  England  in  some  score  of  treaties,  conventions,  and  decrees 
made  between  that  country  and  foreign  nations  between  the  years  1826  and 
1883. 

It  appears  that  the  United  States  has  expressly  excepted  its  coastwise  trade 
in  31  treaties  with  other  commercial  countries,  while  Great  Britain  on  her  part 
has  also  solemnly  and  diplomatically  made  the  same  reservation  in  31  treaties 
with  foreign  nations,  so  that  no  fewer  than  47  commercial  countries  among 
the  international  federation  of  friendly  powers  of  the  world  have  by  treaty  pro- 
nounced themselves  in  favor  of  the  inviolability  of  home  or  coastwise  *  trade 
from  foreign  intrusion :  and  those  countries  that  have  not  so  formally  expressed 
themselves  have  by  their  local  laws  or  immemorial  custom  tenaciously  declined 
to  place  their  coasting  vessels  on  an  equality  with  or  in  the  same  category  as 
95272—12090 


102 

foreign  vessels.  This  right  of  a  nation  to  dominate  over  Its  own  domestic  mari- 
time trade  ha.s  been_  of  such  constant  and  unquestioned  recognition  that  it  has 
becpBa^fc  practi^ayx  a  spr^dple  of  the  law  of  nations.  The  usage  of  nations  is 
the  best  guide  in  the  interpretation  of  treaties,  and  if  one  takes  this  as  evidence 
of  hoyr  };ke.  treaty-ma  king  powers  of  the  world  have  accepted  and  understood  the 
teiTii-i .'  vtvs^eU  of  ^  €oiamer,ce  of  *  *  *  nations,"  or  "vessels,"  it  becomes 
evident  that  they  nave  never  in  a  single  instance  been  regarded  as  referring  to 
or  including  any  vessels  but  those  engaged  in  the  overseas  commerce  and  as  not 
embracing  the  coasting-  trade.  All  nations  have  joined  in  establishing  this 
principle  and  have  insisted  in  perpetuating  it,  many  under  express  treaty  stipu- 
lations, while  those  nations  who  have  not  thus  formally  recorded  their  approval 
of  the  doctrine  have  nevertheless  done  so  tacitly,  and  by  themselves  either  by 
adopting  laws  to  this  effect  or  by  applying  other  and  different  duties  and  charge's 
to  vessels  engaged  in  foreign  commerce  than  to  those  following  the  coastwise 
trade. 

It  may  be  argued  that  these  treaty  provisions  specifically  exempting  coastwise 
vessels  are  evidence  that  Great  Britain  and  the  United  States  in  omitting  them 
in  their  treaties  thereby  recognized  that  the  treaties  between  these  countries 
included  both  foreign  and  coastwise  vessels,  but  such  an  argument  is  without 
merit,  because  the  fact  exists  to-day,  as  it  has  for  generations,  that  England 
herself  discriminates  in  favor  of  her  own  vessels  engaged  in  the  coasting  trade. 
The  treaty  of  1815  provides : 

That  no  higher  or  other  duties  or  charges  shall  be  imposed  *  *  *  in  tho  ports  of 
any  of  His  Britannic  Majesty's  territories  in  Europe  on  the  vessels  of  the  United  States 
than  shall  be  payable  in  the  same  ports  on  BritlslTve&sels. 

If  England's  interpretation  of  the  Hay-Pauncefote  treaty  holds  good,  then 
how  does  she  justify,  under  the  language  just  quoted  of  the  treaty  of  1815.  her 
discrimination  in  tonnage  duties  in  favor  of  her  coasting  vessels?  And  yet 
this  is  precisely  what  she  has  always  done  and  is  doing  to-day.  No  explanation 
or  recrimination  can  alter  the  fact  that  Great  Britain  has  always  adhered 
tenaciously,  like  other  sea-girt  nations,  to  the  policy  of  favoring  coastwise  ves- 
sels, and  that  wherever  Britannia  rules  they  form  a  class  separate  and  distinct 
from  vessels  employed  in  foreign  trade,  and  that  they  have  always  been  ex- 
cepted  from  the  term  "  vessels  "as  used  in  all  international  agreements.  So 
true  is  this  that  it  would  seem  unnecessary  to  go  into  details,  although  abundant 
proof  is  at  hand. 

Take,  for  instance,  the  port  of  Bristol.  Every  vessel  entering  from  or  depart- 
ing for  the  east  coast  of  the  United  States  of  America,  including  ports  of  the 
United  States  of  America  in  the  Gulf  of  Mexico,  pays  Is.  l^d.  per  register  ton, 
while  every  vessel  entering  or  departing  for  the  Channel  Islands,  Ireland,  the 
Isle  of  Man,  or  any  part  of  Great  Britain,  not  including  Barry,  Penarth,  Cardiff, 
Newport,  and  other  ports  to  the  eastward  of  the  Holmes,  pays  only  5d.  per 
registered  ton. 

Prom  a  comparison  of  the  foregoing  port  charges  it  appears  that  an  Ameri- 
can vessel  of  5,000  tons  on  entering  or  departing  from  the  port  of  Bristol  from 
or  for  the  east  coast  of  America  pays  tonnage  dues  at.  the  rate  of  28  cents  per 
ton,  or  56  cents  for  entering  and  departing,  while  vessels  entering  or  departing 
for  the  Channel  Islands,  the  Isle  of  Man,  or  any  part  of  Great  Britain,  with 
a  few  exceptions,  pay  only  10  cents  a  ton,  or  20  cents  for  both  entering  and 
departing.  At  these  rates  an  American  vessel  of  5,000  tons  arriving  from  over 
seas  is  compelled  to  pay  at  the  port  of  Bristol  on  entering  or  departing  $90 
tonnage  dues,  or  on  entering  and  departing  $180,  while  if  no  other  or  higher 
duties  or  charges  were  imposed  than  those  payable  in  the  same  ports  on  British 
vessels  according  to  the  treaty  of  1815,  then  such  American  vessel  would  only 
have  to  pay  $50  on  entering  or  departing,  or  $100  on  entering  and  departing, 
making  a  difference  in  the  first  instance  of  $40  and  in  the  second  of  $80.  This 
may  not  be  discrimination  according  to  English  views,  but  it  looks  exceedingly 
like  it  from  an  American  standpoint. 

The  rates  and  dues  exacted  at  the  port  of  Liverpool  (Mersey  docks  and 
harbor  board)  afford  some  startling  illustrations  of  this  discrimination.  Dock 
tonnage  rates  on  vessels  are  imposed  according  to  the  class  of  voyage — that  is 
to  say,  the  vessel's  destination.  Those  coming  within  class  6,  which  includes 
all  ports  on  the  east  coast  of  North  Americn,  pay  Is.  4d.  per  ton,  while  those 
under  class  2,  between  the  Mull  of  Galloway  and  Duncans  Bay  Head,  includ- 
ing the  Orkney  Isles  and  all  the  islands  on  the  western  coast  of  Scotland,  and 
between  St.  Davids  Head  and  the  Lands  End,  including  the  Scilly  Island  and  the 

95272—12090 


103 

east  coast  of  Ireland  from  Cape  Clear  to  Mailing  Head,  pay  4£d.  per  ton,  and 
those  included  in  class  8,  covering  .all  parts  of  the  east  and  southern  consts  of 
Great  Britain  between  Duncans  Bay  Head  and  the  Lands  End,  including  the 
islands  of  Shetland  and  all  parts  of  the  west  coast  of  Ireland  from  Cape  Clear 
to  Mailing  Head,  including  the  islands  on  that  coast,  pay  6d.  per  ton. 

Harbor  rates  on  vessels  bear  out  the  same  discrimination.  Those  under 
class  2  pay  five-eighths  of  a  penny  per  ton;  those  under  class  3  pay  three- 
fourths  of  a  penny  per  ton;  while  vessels  under  class  6,  embracing  the  trans- 
Atlantic  trade,  have  to  pay  l|d.  per  ton,  or  exactly  double.  There  are  also 
differential  dock  tonnage  rates  on  vessels  in  which  the  same  discrimination 
is  carried  out,  as  they  provide  for  one-half  of  the  rates  specified  under  classes 
2,  3,  and  6. 

"\Yharf  rates  011  vessels  are  as  follows:  Under  class  2,  I|d.  per  ton;  under 
class  3,  14d.  per  ton ;  and  under  class  6,  4d.  per  ton.  This  is  a  clear  preference 
in  favor  of  domestic  coasting  vessels  as  against  vessels  engaged  in  foreign  or 
over-seas  trade  of  2|d.  per  ton. 

These  figures  of  the  port  of  Liverpool  furnish  additional  examples  of  the 
same  rigid  discrimination  in  favor  of  England's  coasting  vessels.  American 
vessels  coming  across  seas,  for  entering  and  leaving  port,  pay  harbor  rates  of 
33  cents  a  ton,  while  some  coasters  pay  only  9  cents  a  ton,  or  27  cents  per  ton 
less  than  the  American  vessel. 

Tonnage  dues  at  the  port  of  London  are  as  follows:  (1)  For  every  vessel 
trading  coastwise  or  entering  inward  or  clearing  outward  from  or  to  any 
place  north  of  latitude  48°  30'  N.,  and  between  longitude  12°  W.  and  65°  E. 
of  Greenwich,  for  every  voyage  both  in  and  out,  Id.  per  ton.  (2)  For  every 
vessel  entering  inward  or  clearing  outward  beyond  those  limits,  l£d.  per  ton. 
(3)  For  vessels  under  100  tons  which  do  not  pass  beyond  the  seaw^ard  limit 
of  the  port,  a  halfpenny  per  ton.  (4)  Coastwise  vessels  not  exceeding  45  tons, 
vessels  bringing  corn  coastwise,  fishing  smacks,  and  lobster  and  oyster  boats  are 
exempt  from  dues. 

This  discrimination  of  1  cent  a  ton  for  entering  and  clearing  port  in  favor 
of  coastwise  vessels  and  against  trans-Atlantic  vessels  may  on  first  impression 
seem  trifling;  but  when  on  calculation  it  is  found  that  on  a  vessel  of  5,000  tons 
this  additional  1  cent  per  ton  on  entering  and  leaving  port  amounts  to  $50,  it  is 
evident  that  all  sense  of  equality  between  ocean-going  vessels  and  those  em- 
ployed in  the  home  trade  only  is  completely  discarded. 

If  England  for  a  moment  believed  that  the  words  "  British  vessels "  or 
"  vessels  of  the  United  States  "  as  used  in  the  treaty  of  1815  included  or  was 
ever  intended  to  include  coasting  vessels,  she  would  not  have  established  and 
enforced  differential  rates  at  her  various  ports  in  favor  of  coasting  vessels, 
for  that  wrould  then  be  a  flagrant  violation  of  the  rights  secured  to  vessels  of 
the  United  States  under  the  treaty.  Not  only  this,  but  such  an  interpretation 
on  the  part  of  England  would  afford  the  United  States  to  justly  denuind  that 
vessels  of  the  United  States  pay  the  same  dues  and  charges  at  British  ports 
as  are  exacted  from  British  vessels  engaged  in  the  coastwise  trade,  instead  of 
those  largely  increased  and  heavier  dues  and  charges  that  American  vessels 
have  to  pay. 

But,  in  addition  to  this,  Great  Britain,  by  assent  and  ratification  under  cir- 
cumstances similar  to  those  that  have  arisen  under  the  Panama  Canal  act,  is 
not  in  a  position  to  now  insist  on  an  interpretation  of  the  equality  clause  of  the 
Hay-Pauncefote  treaty  different  from  that  in  accordance  with  the  established 
interpretation  she  herself  has  put  upon  the  treaty  of  1815  and  of  like  clauses  in 
other  treaties. 

The  second  article  of  the  treaty  of  1815  is  as  follows: 

No  higher  or  other  duties  or  charges  shall  be  imposed  in  any  of  the  ports  of  the  United 
States  011  British  vessels  than  those  payable  in  the  same  ports  by  vessels  of  the  United 
States,  nor  in  the  ports  of  any  of  Mis  Britannic  Majesty's  territories  in  Europe  on  the 
vessels  of  the  United  States  than  shall  be  payable  in  the  same  ports  on  British  vessels. 

This  treaty  was  to  be  obligatory  for  four  years  from  its  ratification;  but  it 
was  extended  for  10  years  by  the  convention  of  October  20,  3  818,  and  indefinitely 
extended  by  the  convention  of  August  6,  1827,  so  that  it  is  a  subsisting  treaty 
to-day. 

It  will  be  seen  that  the  provision  above  quoted  from  the  treaty  of  1815  is  as 
broad  and  comprehensive  as  the  equality  clause  contained  in  the  Hay-Pannce- 
fote treaty  and  that  it  embraces  all  vessels  of  either  country  without  exception 
or  distinction  as  to  whether  they  may  be  engaged  in  overseas  commerce  or  the 
95272—12090 


104 

coastwise  trade.  If,  therefore,  the  expressions  "British  vessels"  and  "vessels 
of  the  United  States  "  do  not  embrace  vessels  employed  in  the  coastwise  trade 
as  England  has  herself  interpreted  the  words  for  nearly  a  century,  it  is  incom- 
prehensible that  she  should  now  pretend  in  an  outburst  of  indignation  that  the 
words  "vessels  of  commerce  of  all  nations"  contained  in  the  Hay-Pauncefote 
treaty  does  refer  to  and  include  those  very  vessels  that  she  has  always  excluded 
under  the  terms  "  British  vessels  "  and  "  vessels  of  the  United  States." 

It  is  an  interesting  fact  not  generally  known  that  the  provision  of  the  treaty 
of  1815,  to  which  reference  has  been  made,  has  been  judicially  interpreted  by 
the  courts  of  the  United  States  in  a  litigation  ending  in  a  judgment  rendered 
by  the  Supreme  Court  of  the  United  States  in  1904,  which  declared  that  a 
British  vessel  engaged  in  foreign  commerce  was  not  entitled  under  the  treaty 
of  1815  to  the  exemption  from  paying  pilotage  accorded  by  law  to  American 
vessels  engaged  in  the  coasting  trade.  In  the  course  of  the  judgment  rendered 
by  Mr.  Justice  White,  he  said : 

Nor  is  there  merit  in  the  contention  that  as  the  vessel  in  question  was  a  British  vessel 
coming  from  a  foreign  port  the  State  laws  concerning  pilotage  are  in  conflict  with  a 
treaty  between  Great  Britain  and  the  United  States  providing  that  no  higher  or  other 
duties  or  charges  shall  be  imposed  in  any  of  the  ports  of  the  United  States  on  British 
vessels  than  those  payable  in  the  same  ports  by  vessels  of  the  United  States.  Neither 
the  exemption  of  coastwise  steam  vessels  from  pilotage  resulting  from  the  law  of  the 
United  States  nor  any  lawful  exemption  of  coastwise  vessels  created  by  State  law  con- 
cerns vessels  in  the  foreign  trade,  and  therefore  any  such  exemption  does  not  operate  to 
produce  a  discrimination  against  British  vessels  engaged  in  such  trade.  In  substance 
the  proposition  but  asserts  that  because  by  the  law  of  the  United  States  steam  vessels  in 
the  coastwise  trade  have  been  exempt  from  pilotage  regulations,  therefore  there  is  no 
power  to  subject  vessels  in  foreign  trade  to  pilotage  regulations,  even  although  such 
regulations  apply  without  discrimination  to  all  vessels  in  such  foreign  trade,  whether 
domestic  or  foreign.  (Olsen  v.  Smith,  195  U.  S.,  344.) 

Not  only  has  this  interpretation  of  the  treaty  of  1815  been  adopted  and 
carried  into  practice  by  Great  Britain  for  nearly  a  century,  thus  giving  it  the 
same  validity  as  though  a  clause  excepting  coastwise  trade  had  been  therein 
inserted,  but  England's  continued  silence  and  acquiescence  and  failure  to  object 
to  a  like  interpretation  by  the  Supreme  Court  of  the  United  States  in  the  case 
cited  is  in  itself  an  implied  ratification  and  adoption  thereof  and  is  equivalent 
in  its  consequences  to  an  express  declaration  of  approval. 

If,  therefore,  the  words  "  British  vessels  "  and  "  vessels  of  the  United  States," 
as  used  in  the  treaty  of  1815,  do  not  include  vessels  engaged  in  the  coasting 
trade,  as  I  feel  has  been  sufficiently  demonstrated,  it  is  difficult  to  understand 
how  the  words  "  vessels  of  commerce  of  all  nations,"  as  used  in  the  Hay-Paunce- 
fote treaty,  does  include  them. 


[From  Congressional  Record,  May  2,  1913.] 

PANAMA  CANAL  TOLLS  AND  THE  HAY-PAUNCEFOTE  TREATY. 

(Paper  by  Hon.  Richard  Olney,  Secretary  of  State  under  Grover  Cleveland,  read  at  the 
annual  meeting  of  the  American  Society  of  International  Law,  Washington,  I).  C., 
Apr.  25,  1913.) 

In  construing  the  Hay-Pauncefote  treaty  it  is  necessary  to  remember  that 
there  have  been  several  different  phases  of  American  opinion  and  American 
policy  touching  the  ownership,  construction,  maintenance,  and  use  of  the  canal. 
The  canal  has  always  been  conceived  of  as  a  work  of  world-wide  interest  and 
importance,  which  all  nations  without  exception  or  discrimination  should  be  able 
to  use,  subject,  of  course,  to  all  rights  of  the  owner  of  the  canal,  including  that 
of  charging  reasonable  tolls.  Among  the  earliest  declarations  of  policy  by  the 
United  States  Government,  perhaps  the  earliest,  was  an  intimation  that  the 
work  should  be  accomplished,  not  "  by  the  support  and  unassisted  efforts  of  any 
one  power,"  but  "  by  common  means  and  united  exertions  " — whether  of  all 
civilized  powers  or  of  American  powers  exclusively  is  not  perhaps  clear.  Secre- 
tary Clay's  idea  that  the  canal  be  built  by  a  combination  of  the  powers  inter- 
ested seems  never  to  have  taken  any  real  root. 

This  first  phase  was  succeeded  by  the  view  that  the  canal  should  be  built  by 
the  State  owning  the  route  of  the  canal  or  by  a  company  or  association  having 
from  the  State  the  necessary  concessions  for  that  purpose.  The  United  States 
was  to  assist  by  appropriate  guaranties;  and  by  the  treaty  with  New  Granada 

95272—12090 


105 

of  3846,  in  consideration  of  Now  Granada's  granting  citizens  of  the  United 
States  equal  treatment  with  citizens  of  New  Granada  as  respects  any  mode  of 
transit  across  the  Isthmus,  the  United  States  guaranteed  the  perfect  neutrality 
of  the  Isthmus  and  also  New  Granada's  rights  as  sovereign  and  owner  of  the 
Isthmus. 

A  third  phase  of  American  opinion  and  policy  appears  four  years  later  in  a 
treaty  then  made  with  Great  Britain.  The  United  States  was  moved  to  enter 
into  it  by  various  considerations — by  the  improbability  of  the  canal  being  built 
by  the  territorial  sovereign,  by  Great  Britain's  claim  of  a  protectorate  over  the 
(astern  terminus  of  the  Nicaraguan  route  then  universally  accepted  as  the  most 
eligible  route,  and  by  the  natural  and  reasonable  belief  that  financiers  would 
more  readily  engage  in  the  canal  enterprise  if  Great  Britain  joined  the  United 
States  in  becoming  sponsor  for  the  safety  and  neutrality  of  the  canal  and  for 
its  equal  use  by  all  nations.  The  outcome  was  the  famous  Clayton-Bulwer 
treaty,  the  essential  features  of  which  are  these: 

First.  A  canal  built  by  the  State  owning  the  canal  route  or  by  its  conces- 
sionaires. 

Second.  A  compact  by  the  parties  that  neither  will  build  nor  take  part  in 
building  the  canal,  directly  or  indirectly,  nor  obtain  nor  maintain  exclusive 
control  over  it. 

Third.  A  specific  agreement  as  to  the  modes  in  which  both  parties  may  aid  in 
the  construction  of  the  canal — as  by  each  using  its  influence  for  such  construc- 
tion with  local  governments  and  for  the  establishment  of  a  free  port  at  each 
end  of  the  canal,  and  by  each  undertaking  to  protect  the  canal  while  in  process 
and  after  completion  to  guarantee  its  neutrality  and  to  thus  safeguard  the 
capital  invested. 

Fourth.  An  undertaking  by  each  to  enter  into  contracts  with  Central  American 
States  with  the  view  to  carry  out  the  great  purpose  of  the  treaty,  to  wit,  the 
construction  of  a  ship  canal  between  the  two  oceans  "  for  the  benefit  of  mankind 
and  on  equal  terms  to  all,"  and  for  the  purpose  of  protecting  the  same. 

Fifth.  Enjoyment  by  the  citizens  or  subjects  of  each  party  of  the  same  "  rights 
or  advantages  in  regard  to  commerce  or  navigation  through  the  canal,"  charges 
and  conditions  of  traffic  to  be  approved  as  just  or  equitable  by  the  Governments 
of  the  contracting  parties. 

Sixth.  An  invitation  to  all  friendly  States  to  join  in  contributing  to  the  con- 
struction of  the  canal,  coupled  with  the  declaration  that  the  equal  terms  and 
conditions  secured  to  the  citizens  or  subjects  of  the  contracting  parties  shall  be 
enjoyed  by  the  citizens  and  subjects  of  every  other  State  "  which  is  willing  to 
grant  thereto  (to  the  canal)  such  protection  as  the  United  States  and  Great 
Britain  engage  to  afford." 

'  The  two  notable  features  of  this  phase  of  American  canal  policy  are,  first, 
the  self-denying  ordinance  preventing  the  United  States  or  Great  Britain  from 
building  or  controlling  the  canal;  and,  second,  the  clear  recognition  of  the  right 
of  a  State  constructing  on  its  own  territory  an  artificial  waterway  like  the 
canal  to  dictate  the  conditions  of  its  use,  as  by  permitting  the  use  to  some  parties 
on  conditions  of  their  undertaking  to  protect  the  canal  and  denying  its  use  to 
other  parties  not  willing  to  undertake  such  protection. 

The  next  phase  of  American  canal  opinion  and  policy  was  foreshadowed  as 
early  as  1869,  when  Secretary  Seward  officially  "expressed  the  very  deliberate 
conviction"  (1)  that  "henceforth  neither  any  foreign  Government  nor  the 
capitalists  of  any  foreign  nation,  except  the  Govemient  and  capitalists  of  the 
United  States,  will  ever  undertake  in  good  faith  to  build  the  canal  across  the 
Isthmus  of  Darien";  (2)  that  "the  neutrality  most  desirable  for  Colombia  is 
to  be  found  in  a  combination  of  the  power,  authority,  and  influence  of  the 
United  States  of  America  and  the  power,  authority,  and  influence  of  the  United 
States  of  Colombia  to  protect  the  canal  and  make  it  productive  of  the  largest 
commercial  benefit  to  all  nations";  and  (3)  that  "not  only  would  the  United 
States  be  unwilling  to  enter  into  an  entangling  alliance  with  other  foreign 
nations  for  the  construction  and  maintenance  of  a  passage  through  the  Isthmus, 
but  also  that  the  idea  that  other  commercial  powers  could  and  would  consent 
to  enter  into  a  combination  with  the  United  States  of  America  for  that  purpose 
is  impracticable  and  visionary."  About  the  same  time  a  convention  was  ac- 
tually negotiated  at  Bogota  by  which  the  United  States  was  to  build  the  canal. 
On  various  grounds  not  necessary  to  state  the  convention  failed  of  ratification 
at  Washington. 

95272 — 12090 


106 

Meanwhile,  and  before  Secretary  Reward's  prophetic  words  were  generally 
accepted  as  verity,  there  ensued  the  de  Lesseps  attempt  to  construct  tfce  canal 
over  the  Panama  route.  The  final  abandonment  of  that  attempt  in  1889  forced 
upon  the  country  the  conviction  that  Secretary  Seward  was  right,  and  that  if 
the  canal  was  to  be  built  it  must  be  built  by  the  United  States,  both  because 
the  United  States  was  the  only  American  power  with  the  necessary  resources 
and  because  the  construction  and  control  of  the  canal  by  any  European  power 
would  conflict  with  our  settled  policy  respecting  European  interference  in  x\mer- 
Ican  affairs.  President  Hayes,  in  a  special  message  to  Congress  in  March,  1880, 
justly  interpreted  American  sentiment  by  declaring :  "  The  policy  of  this  country 
is  a  canal  under  American  control;  the  United  States  can  not  consent  to  the 
surrender  of  this  control  to  any  European  power  or  to  any  combination  of 
European  powers."  He  condensed  the  whole  argument  for  the  policy  into  the 
fewest  words  by  adding  that  the  canal  would  be  "  virtually  a  part  of  the  coast 
line  of  the  United  States."  President  Cleveland,  in  his  message  of  December, 
1885,  was  equally  explicit  as  to  the  inadmissibility  of  any  control  of  the  canal 
by  a  European  power. 

The  final  phase  of  American  opinion  and  policy  being  that  the  United  States 
must  build  and  control  the  canal,  and  that  any  share  in  its  construction  or 
control  by  any  European  power  was  to  be  excluded,  the  first  step  to  be  taken 
obviously  was  the  removal  of  the  obstacle  presented  by  the  Clayton-Bulwer 
treaty.  That  object  was  meant  and  thought  to  be  attained  by  the  Hay-Pa  unce- 
fote  treaty  of  1901.  It  clearly  permits  the  United  States  to  build  the  canal. 
Does  it  also  debar  Great  Britain  from  any  control  of  the  canal  except  such  as 
results  from  the  express  provision  that  the  canal  shall  be  open  for  use  to  Great 
Britain  and  all  other  nations  on  terms  of  entire  equality?  The  answer  is  to  be 
found  in  the  terms  of  the  treaty  itself  interpreted  according  to  their  true  intent. 
They  can  be  so  interpreted  only  by  reverting  to  the  previous  relations  of  the 
parties  to  the  canal  enterprise,  to  the  new  relations  to  the  enterprise  the  parties 
meant  to  assume,  and  to  the  objects  each  had  in  view  in  making  the  treaty. 

1.  The  Hay-Pauncefote  treaty  of  November  18,  1901,  it  is  to  be  noted,  does 
not  merely  authorize  the  United  States  to  build  the  canal  through  the  territory 
of  some  other  power,  though  such  would  have  been  a  possible  construction  of  the 
rejected  Hay-Pauncefote  treaty  of  February  5,  1901,  but  the  treaty  of  November 
38,  1901,  adds  a  clause  not  found  in  the  February  treaty  to  the  effect  that  no 
change  of  territorial  sovereignty  of  the  country  or  countries  traversed  by  the 
canal  shall  affect  the  obligations  of  the  parties  to  the  treaty,  thus  assenting  in 
advance  to  the  acquisition  by  the  United  States  of  the  territory  needed  for  the 
canal     Hence,  since  the  United  States  did  afterwards  acquire  the  Canal  Zone, 
the  terms  of  the  November  Hay-Pauncefote  treaty  apply  to  the  case  of  an  arti- 
ficial waterway  constructed  by  a  State  on  its  own  territory. 

2.  It  is  to  be  further  noted  that  by  way  of  asserting  the  exclusive  control 
of  the  canal  by  the  United  States  and  eliminating  any  semblance  of  control  by 
other  powers  the  November  Hay-Pauncefote  treaty  omits  article  3  of  the  Feb- 
ruary treaty,  by  which  other  powers  were  to  have  notice  of  the  treaty  and  be 
invited  to  adhere  to  it. 

3.  The  facts  being,  then,  that  the  United  States  has  rightfully  built  the  canal 
through  territory  of  its  own;   that  besides  having  become  the  owner  of  the 
canal  route,  the  treaty  expressly  accords  to  the  United  States  all  the  rights 
incident  to  construction;  and  that  in  undertaking  the  canal  as  a  United  States 
enterprise  the  United  States  did  so  with  the  manifest  purpose  of  excluding  all 
foreign  control  beyond  that  resulting  from  the  stipulation  for  equality  of  terms 
to  all  users  of  the  canal — what  is  there  in  the  language  of  the  treaty  to  justify 
the  claim  that  the  United  States  has  made  a  further  submission  to  foreign 
control  by  a  stipulation  which  prevents  it  from  allowing  the  use  of  the  canal 
by  its  own  vessels  or  those  of  its  nationals  on  any  terms  it  chooses  to  fix? 

4.  The  one  provision  possible  to  be  relied  upon  for  that  purpose  is  rule  1  of 
article  3,  declaring  that  "  the  canal  shall  be  free  and  open  to  the  vessels  of  com- 
merce  and  of  war  of  all  nations  observing  these  rules  on   terms  of  entire 
equality  *     *."     And  the  single  point  is,  Are  the  words  "  all  nations  "  in- 
clusive or  exclusive  of  the  United  States? 

It  seems  difficult  to  successfully  contend  that  the  United  States  is  included. 

(a)  The  treaty  is  a  contract  by  which  the  proprietor  of  a  canal  fixes  the  terms 
upon  which  it  grants  the  use  of  the  canal  to  its  customers. 

(b)  It  was  needed  for  that  purpose  only— it  was  not  needed  to  fix  the  terms 
upon  which  the  United  States  and  its  nationals— its  cestui  que  trust — should 

95272—12090 


107 

u?e  the  canal,  because  its  use  without  tolls  or  otherwise,  as  the  United  States 
might  choose,  is  a  necessary  incident  of  its  ownership  of  the  canal. 

It  can  not  reasonably  be  argued  that,  in  fixing  the  terms  for  the  use  of  its 
canal  cr-stomers.  the  United  States  looked  upon  itself  as  one  of  the  customers. 

(c)  The  words  under  construction  are  in  substance  the  first  of  a  set  of  six 
rules  adopted  by  the  United  States  as  the  basis  of  the  neutralization  of  the 
rtinal. 

But  the  other  five  certainly  apply  only  to  parties  other  than  the  United  States, 
go  that  there  is  the  strongest  reason  for  holding  that  the  first  of  them  is  to  be 
a  a  like  application. 

(d)  And   if  the  British  construction  be  correct   instead  of  liberating  the 
United   States  from   all  foreign  control  of  the  canal  and  from  all  duties  to 
foreign  powers  in  respect  to  its  use — except  not  to  discriminate  between  them — 
the  Hay-Pauncefote  treaty  compels  the  United  States  to  reverse  its  established 
policy  and  to  devise  a  plan  for  subsidizing  its  own  vessels  in  order  that  they 
may  have  such  free  or  other  use  of  the  canal  as  the  United  States  may  decide 
to  be  demanded  by  United  States  interests. 

(e)  The  claim  sometimes  made  that  by  building  and  owning  the  canal  the 
United  States  engages  in  a  public  calling  and  thereby  undertakes  to  serve  all 
coiners  without  discrimination  and  at  a  reasonable  rate  would  seem  to  have 
no  application  to  the  present  case.     The  principle  affects  only  the  users  of  the 
public  work  and  only  prescribes  entire  equality  as  between  them — it  in  no  way 
prevents  the  owner  of  the  work,  or  those  for  whom  it  holds  the  work  in  trust, 
from  using  it  in  any  way  and  to  any  extent  that  the  legal  or  beneficial  owner 
or  owners  may  determine. 

Besides,  so  far  as  international  law  on  the  subject  can  be  regarded  as  settled, 
the  rule  is  that  "while  a  natural  thoroughfare,  although  wholly  within  the 
dominion  of  a  government,  may  be  passed  by  commercial  ships  of  right,  yet  the 
nation  which  constructs  an  artificial  channel  may  annex  such  conditions  to 
its  use  as  it  pleases."  (3  Moore,  268;  The  Avon,  18  Int.  Rev.  Record,  165.) 

(f )  Great  stress  is  laid  upon  the  preamble  of  the  treaty  and  its  reference  to 
the  neutralization  of  the  canal  as  defined  in  article  8  of  the  Clayton-Bulwer 
treaty,  which,  it  is  claimed,  compels  the  United  States  to  forget  that  it  is  the 
owner  of  the  canal,  and,  as  regards  its  own  vessels,  forces  it  to  look  upon  itself 
as  a  canal  customer  bound  to  pay  for  its  use  the  regular  tolls.    It  is  elaborately 
argued  that  neutralization  of  this  sort  is  a  policy  to  which  the  United  States 
has  been  committed  from  the  earliest  times. 

Bui  the  argument  ignores  necessary  distinctions  and  fails  to  note  that 
"neutralization"  of  a  canal  describes  a  policy  applicable  as  between  the  canal 
owners  and  customers  of  the  canal,  but  in  no  way  touches  or  restricts  the  canal 
owner's  rights  or  the  canal  owner's  policy  as  to  the  use  of  the  canal  by  itself. 
The  several  phases  of  American  opinion,  official  and  otherwise,  respecting  the 
construction  and  control  of  the  Isthmian  Canal  have  already  been  pointed  out. 
While  merely  in  the  position  of  a  probable  user  of  the  canal,  the  United  States 
always  and  consistently  claimed  that  the  terms  and  conditions  .of  use  should  be 
the  same  for  all  comers,  but  in  no  way  denied  or  disputed  the  inherent  rights 
of  the  canal  owner.  Those  rights,  as  already  shown,  are  expressly  recognized 
by  the  Clnyton-Bulwer  treaty,  which  allows  the  owner  to  fix  terms  at  will  for 
the  use  of  the  canal  by  States,  withholding  the  protection  to  the  canal  given  by 
the  United  States  and  Great  Britain,  and  even  permits  the  owner  to  deny  to 
such  States  the  use  of  the  canal  altogether.  Since  accepting  its  inevitable  r61e 
of  the  canal  builder  and  owner,  the  United  States  has  always  and  consistently 
stood  on  its  rights  as  such,  and.  beyond  agreeing  to  the  neutralization  of  the 
canal  as  between  customers,  has  repudiated  the  idea  of  any  control  of  the  canal 
except  its  own. 

How  clearly  such  is  the  case  is  shown  by  the  briefest  examination  of  the 
neutralization  provided  for  in  article  8  of  the  Clayton-Bulwer  treaty,  the  prin- 
ciple of  which  is  not  to  be  impaired  by  the  Hay-Pauncefote  treaty.  What  sort 
of  neutralization  is  it?  First,  the  United  States  and  Great  Britain  are  to  de- 
termine what  are  just  and  equitable  charges  for  the  use  of  the  canal  by  their 
citizens  or  subjects:  second,  the  canal  shall  be  open  on  those  same  terms  to 
citizens  and  subjects  of  other  states ;  but.  third,  the  citizens  and  subjects  of  other 
states  shall  have  the  benefit  of  those  terms  only  if  such  other  states  grant  the 
same  protection  to  the  canal  as  the  United  States  and  Great  Britain  engage  to 
afford.  Now,  there  is  no  element  of  this  species  of  neutralization  which  the 

95272—12090 


108 

Hay-Pauncefote  treaty  leaves  unimpaired,  since  tlie  United  States  alone  fixes 
reasonable  and  equitable  rules  for  the  canal  traffic;  since  the  canal  may  be 
used  by  all  nations  on  no  other  condition  than  that  they  observe  those  rules; 
and  since — as  shown  by  the  elimination  from  this  treaty  of  article  3  of  the  un- 
ratified  Hay-Pauncefote  treaty  of  February,  1901 — adherence  to  the  treaty  by 
the  other  powers  is  not  to  be  invited.  If  by  construing  article  8  in  connection 
with  other  articles  of  the  Clayton-Bulwer  treaty  any  controlling  principle  of 
neutralization  is  to  be  deduced,  it  is  the  simple  requirement  that  the  same 
terms  shall  be  made  to  all  customers  of  the  canal,  a  requirement  restricting 
the  rights  of  the  canal  owner  to  just  that  extent  and  no  more  and  not  disabling 
it  from  treating  its  own  shipping  in  any  way  it  sees  fit.  The  like  result  follows 
from  the  Constantinople  convention  of  1888,  which  is  declared  to  be  the  basis 
of  the  neutralization  of  the  canal  and  of  the  rules  laid  down  in  article  3  for 
its  navigation.  By  that  convention  identical  rules  are  to  apply  to  all  vessels 
using  the  Suez  Canal  in  time  of  war  or  time  of  peace  without  distinction  of 
flags,  but  "  the  rights  of  Turkey  as  the  territorial  power  are  reserved,"  together 
with  the  sovereign  rights  of  the  Sultan  and  the  rights* and  immunities  of  the 
Khedive. 

It  has  been  contended  that  the  Senate  of  the  United  States  understood  the 
Hay-Pauncefote  treaty  to  mean  what  Great  Britain  now  claims  it  to  mean, 
because  of  the  Senate's  failure  to  pass  the  Bard  resolution  in  favor  of  Amer- 
ican coastwise  shipping.  But  the  claim  seems  to  be  thoroughly  disposed  of  by 
proof  that  the  reason  of  the  failure  was  the  opinion  of  Senators  that  the 
resolution  was  supernous,  that  nothing  in  the  treaty  prohibited  the  United  States, 
as  the  builder  and  owner  of  the  canal,  from  exempting  its  coastwise  shipping 
from  tolls.  Senator  Bard  himself  has  since  so  stated  in  a  letter  which  was 
publicly  read  in  the  House  of  Representatives.  He  is  emphatically  corroborated 
on  that  point  by  other  Senators. 

It  is  also  contended  that  American  vessels  must  pay  tolls,  because  otherwise 
the  reasonable  and  equitable  tolls  provided  for  by  the  treaty  can  not  be  ascer- 
tained. The  contention  assumes,  of  course,  the  very  thing  at  issue,  namely, 
that  in  the  contemplation  of  the  treaty  and  by  its  true  construction  American 
vessels  are  bound  to  pay  tolls.  But  no  other  answer  seems  to  be  required 
than  that,  for  the  purpose  of  computing  reasonable  tolls  for  the  use  of  the 
canal,  it  is  not  necessary  that  American  vessels  should  pay  tolls,  but  only  that 
the  amount  they  would  pay  if  they  were  not  exempt  should  be  calculated  and 
used  in  the  computation  as  if  paid. 

To  sum  up  the  conclusions  resulting  from  the  foregoing  considerations  it  is 
submitted  that — 

1.  The  United  States,  as  builder  and  owner  of  an  artificial  waterway  within 
its  own  territory,  is  entitled  to  dictate  the  conditions  of  its  use  unless  and  only 
so  far  as  it  has  contracted  the  right  of  way. 

2.  It  has  made  no  such  contract,  except  with  Great  Britain  and  by  the  Hay- 
Pauncefote  treaty  and  by  the  clauses  of  that  treaty  which  stipulate  for  the  use 
of  the  canal  by  "  all  nations  "  on  equal  terms  and  for  reasonable  and  equitable 
tolls. 

3.  As  the  term  "  all  nations  "  comprehends  not  only  states,  but  their  nationals, 
the  crucial  question  is :  Are  the  words  "  all  nations  "  inclusive  or  exclusive  of 
the  United  States  and  its  nationals? 

4.  The   principle   is  well    settled   that   a    state   conveys   away  its   rights   of 
sovereignty  or  property  only  by  terms  which  are  clear  and  express  and  are  not 
susceptible  of  any  other  reasonable  construction.     If  the  terms  are  vague  and 
of  doubtful   import,   the  presumption  is  against  the  state's  intention   to  part 
with  or  abridge  its  jurisdictional  or  property  rights. 

5.  Hence,  as  the  term  "all  nations"  as  used  in  the  treaty  may  be  taken  to 
mean  either  all  without  exception  or  all  except  the  United  States,  the  latter 
meaning  is  to  be  accepted  as  the  true  one,  because  the  least  restrictive  of  the 
normal  rights  and  powers  of  the  United  States. 

6.  But  it  is  unnecessary  to  rely  upon  presumption.     The  treaty  assumes  the 
United  States  to  be  the  owner  of  a  canal  to  be  built  by  it  on  its  own  territory, 
and  must  be  taken  to  have  had  as  its  natural  and  legitimate  aim  the  fixing  of  the 
terms  upon  which  other  nations  might  use  it.     Except  as  necessarily  abridged 
by  such  terms,  nothing  in  the  treaty  indicates  any  purpose  to  further  abridge 
the  rights  of  the  United  States  as  canal  builder  and  owner. 

7.  In  short,  the  treaty  is  an  instrument  by  which  the  proprietor  of  a  canal 
fixes  and  states  the  terms  of  use  to  its  customers. 

95272 — 12090 


109 

There  is  an  utter  absence  of  evidence  that  the  United  States  regarded  itself  as 
one  of  its  customers. 

8.  The  neutralization  proposed  by  the  Clayton-Bulwer  treaty  resembles  that 
proposed  by   the  Hay-Pauncefote   treaty   only   in   the   idea    that   the  operating 
Charges  and  rules  for  use  of  the  canal  shrill  be  the  same  for  all  nations.     It 
differs,  of  course,  in  the  vital  feature  of  conditioning  such  equality  of  terms  upon 
protection  being  afforded  to  the  canal. 

9.  When  five  out  of  six  of  the  treaty  rules  for  the  use  of  the  canal  do  not 
apply  to  the  United  States  it  is  a  reasonable  conclusion  that  the  sixth  also  was 
not  meant  so  to  apply. 

10.  The  different  phases  of  American  public  and  official  sentiment  respecting 
the  canal   are  noteworthy  and  not  to  be  overlooked  in  construing  the  Hay- 
Pa  uncefote  treaty. 

While  the  United  States  was  expecting  to  be  merely  one  of  the  users  of  the 
canal,  it  strenuously  insisted  upon  equality  of  rules  and  charges  for  the  use  of 
the  canal  and  did  not  concern  itself  about  the  rights  of  the  canal  owner. 

When  the  role  of  builder  and  owner  of  the  canal  was  forced  upon  it,  it  as 
strenuously  insisted  upon  complete  ownership  and  complete  control,  and  complete 
elimination  of  all  foreign  participation  or  control. 

Its  purposes  and  views  are  completely  defeated  if  the  Hay-Pauncefote  treaty 
is  to  be  construed  according  to  the  British  contention,  and  the  United  States 
has  lost  the  ordinary  and  normal  right  of  the  canal  owner  to  be  exempt  from  the 
tolls  and  charges  it  makes  to  customers. 

On  the  grounds  and  in  view  of  the  considerations  above  stated,  the  United 
States  may  contend — and  it  is  believed  can  rightfully  contend — that  the  Hay- 
Pauncefote  treaty  of  November,  1901,  does  not,  as  justly  interpreted,  prevent  the 
United  States  from  exempting  its  coastwise  shipping  from  the  payment  of  tolls 
for  the  use  of  the  Panama  Canal.  But  to  the  English  contention  that  the  con- 
troversy should  be  referred  to  arbitration  there  seems  to  be  no  sufficient  answer. 
Both  countries  are  firmly  committed  to  arbitration  as  the  best  method  for  the 
settlement  of  international  disputes.  It  may  be  safely  assumed  without  argu- 
ment that  if  the  matter  in  difference  is  not  otherwise  disposed  of  it  will  be  left 
to  an  arbitral  tribunal.  It  does  not  follow  that  resort  must  be  had  or  should 
be  had  to  The  Hague  or  The  Hague  Permanent  Court  of  Arbitration.  Our 
existing  arbitration  treaty  with  Great  Britain,  article  1,  expressly  excepts  from 
reference  to  that  court  differences  which  "  concern  the  interests  of  third  par- 
ties " — and  in  the  case  of  the  present  difference  over  the  meaning  of  the  Hay- 
Pauncefote  treaty  the  "  third  parties "  with  interests  concerned,  biit  without 
legal  standing  in  respect  of  them,  include  almost  all  the  countries  of  Europe. 
That  the  present  difference  should  not  go  to  The  Hague  Permanent  Court  is  as 
clear  as  that  the  parties  are  not  bound  to  send  it  there.  International  arbitra- 
tion derives  its  chief  value  from  confidence  in  the  arbitral  tribunal  and  in  its 
ability  and  purpose  to  do  justice — an  award  lacking  that  confidence  is  not  only 
likely  to  work  unfortunately  as  regards  the  particular  case,  but  also  to  discredit 
the  cause  of  arbitration  generally — and  the  fact  must  be  reckoned  with  that  in 
this  country  there  is  a  widespread  conviction  which  has  been  publicly  voiced  in 
high  official  circles  that  all  Europe  is  interested  in  the  success  of  the  British 
contention,  and  that  submission  of  the  controversy  to  arbitration  under  The 
Hague  convention  would  be  in  the  nature  of  a  farce.  American  sentiment  on  this 
point  is  no  doubt  in  part  due  to  the  nature  of  the  subject  matter  in  controversy. 
The  claim  of  Great  Britain  is,  in  effect,  a  territorial  claim.  The  United  States 
possesses  no  more  costly  and  perhaps  no  more  valuable  piece  of  territory  than 
the  Panama  Canal,  and  Great  Britain's  claim  is  that  the  Hay-Pauncefote  treaty 
not  only  encumbers  that  territory  with  equal  rights  of  use  by  all  other  nations, 
but  impresses  upon  it  a  servitude  by  which  the  United  States  loses  the  free  use 
of  its  own  canal  for  its  own  vessels.  It  is  rights  of  that  nature  as  to  which  both 
countries  are  especially  sensitive  and  which  both  countries  have  been  peculiarly 
careful  to  safeguard.  Thus,  for  territorial  claims  the  general  arbitration  treaty 
of  1897  (perfected  as  such  on  the  part  of  Great  Britain,  but  killed  in  the  United 
States  Senate)  provided  a  tribunal  of  six  arbitrators,  three  of  whom  should  be 
chosen  by  each  party,  and  whose  award  should  be  final  only  when  made  by  not 
less  than  five  arbitrators.  The  same  general  idea  governed  in  the  case  of  the 
Alaska  boundary,  though  the  final  award  might  be  by  four  out  of  the  six.  A 
more  important  difference,  however,  is  that  in  the  case  of  the  Alaska  boundary 
the  arbitrators  were  to  consist  of  "  impartial  jurists  of  repute,"  whereas  by  the 
1897  treaty  they  were  to  be  taken  from  the  judges  of  the  highest  courts  of  the 
IK. -7  2— 12090 


110 

respective  countries.  That  such  a  tribunal  should  be  made  the  interpreter  of 
the  Hay-Pauncefote  treaty,  if  arbitration  of  its  terms  becomes  necessary,  and 
would  be  greatly  preferable  to  a  tribunal  constituted  as  in  the  Alaska  boundary 
controversy  is  unquestionable.  It  would  be  superior  in  dignity,  in  impartiality, 
and  in  general  competency.  It  would  be  infinitely  more  likely  to  be  regarded  as 
beyond  the  reach  of  any  but  the  most  correct  motives  and  influences,  and  the 
results  would  be  infinitely  more  likely  to  command  the  cheerful  acquiescence 
of  both  countries. 

[From    Senate    Document    No.    32,    Sixty-third    Congress,    first    session.] 
PANAMA    CANAL    TOLLS. 

The  Issues  Between  the  United  States  and  Great  Britain  in  Regard  to 
Panama  Canal  Tolls,  as  Raised  in  the  Recent  Diplomatic  Correspond- 
ence. 

(Address  by  Chandler  P.  Anderson,  formerly  counselor  for  the  Department  of  State, 
before  the  American  Society  of  International  Law  at  the  morning  session  on  Apr.  25, 
ID-lo. ) 

It  has  seemed  desirable  to  the  committee  in  charge  of  the  program  for  this 
meeting  of  the  society  that,  as  a  preliminary  to  the  discussion  of  the  Panama 
Canal  tolls  questions  which  are  included  in  the  program,  a  brief  outline  should 
be  presented  showing  the  exact  issues  between  the  two  Governments  in  that 
controversy  as  raised  in  the  diplomatic  correspondence,  and  the  arguments 
which  have  been  advanced  on  both  sides  in  support  of  their  respective  conten- 
tions. It  is  for  this  purpose,  rather  than  for  the  purpose  of  weighing  the  value 
of  these  arguments,  that  this  paper  has  been  prepared. 

Before  taking  up  the  issues  which  have  been  raised  in  the  diplomatic  cor- 
respondence,  it  is  important  to  have  in  mind  the  following  considerations : 

Inasmuch  as  the  United  States  and  Great  Britain  are  the  only  parties  to  the 
Hay-Pauncefote  treaty  of  November  18.  1901,  Great  Britain  alone  of  all  nations 
is  entitled  to  question  the  course  adopted  by  the  United  States  under  that  treaty, 
but  even  Great  Britain  is  not  entitled  under  the  terms  of  the  treaty  to  question 
the  course  adopted  by  the  United  States  toward  other  nations  with  reference  to 
the  use  of  the  canal  so  long  as  that  course  involves  no  discrimination  against 
Great  Britain.  Great  Britain  has  no  authority  under  the  treaty  or  otherwise 
to  speak  for  other  nations  on  the  subject  of  the  canal  tolls,  and  is  not  con- 
cerned with  the  attitude  of  the  United  States  toward  other  nations  in  dealing 
with  this  matter  except  as  Great  Britain's  own  interests  are  affected  thereby. 
The  attitude  of  the  United  States  toward  other  nations  will  unquestionably  be 
that  best  adapted  for  securing  their  observance  of  the  rules  adopted  by  the 
United  States  for  the  use  of  the  canal,  the  purpose  of  which  rules  is  to  carry 
out  the  traditional  policy  of  the  United  States  for  the  neutralization  of  the 
canal.  In  this  connection,  however,  it  is  of  interest  to  note  that  there  is  noth- 
ing in  the  treaty  which  would  prevent  the  United  States  from  granting  equal 
treatment  to  any  other  nation  even  if  that  nation  does  not  observe  the  rules, 
the  observance  of  which  would  insure  equal  treatment.  Moreover,  it  is  open 
for  the  United  States  to  make  with  any  other  nation  any  arrangement  which  is 
mutually  agreeable  on  the  subject,  and  the  only  interest  of  Great  Britain 
therein  is  that  there  shall  be  no  discrimination  against  British  interests. 

It  is  clear  from  these  considerations  that  any  discussion  between  Great 
Britain  and  the  United  States  on  the  subject  of  canal  tolls  must  be  limited  to 
the  question  of  discrimination  against  British  vessels,  and  it  will  be  found 
upon  examining  the  diplomatic  correspondence  that  this  limitation  has  been 
recognized  by  Great  Britain. 

There  has  apparently  been  considerable  confusion  in  the  widespread  dis- 
cussion about  canal  tolls  which  has  been  going  on  for  the  past  eight  months  in 
this  country  as  to  the  exact  contentions  of  both  Governments  and  the  real  ques- 
tion at  issue  between  them.  A  large  part  of  this  discussion  has  been  directed 
to  the  question  of  whether  the  United  States  is  not  at  liberty  under  the  treaty 
to  do  what  it  pleases  in  regard  to  the  payment  of  tolls  by  its  own  vessels  in  its 
own  canal.  As  a  matter  of  fact,  this  contention  is  not  made  by  Great  Britain, 
and  there  is  nothing  in  the  treaty  which  would  justify  any  such  contention. 
The  United  States  is  clearly  entitled  to  exempt  its  own  vessels,  either  of  war  or 
of  commerce,  whether  engaged  in  the  coastwise  or  foreign  trade,  from  the  pay- 
95272—12090 


Ill 

ment  of  any  tolls,  and  likewise  it  is  entitled  to  refund  tolls  exacted  from  those 
vessels.  The  question  at  issue  is  not  whether  that  can  be  done,  but  whether  the 
United  States,  having  exempted  its  own  vessels  from  the  payment  of  tolls,  is 
st  liberty  under  the  treaty  to  exact  tolls  from  British  vessels  so  long  as  Great 
Britain  observes  the  rules  adopted  by  the  United  States  in  the  treaty. 

That  issue  is  not  one  which  should  arouse  bad  feeling  or  justify  the  charge 
of  bad  faith  on  either  side,  for  it  involves  at  most  only  a  question  of  pe- 
cuniary damages,  and  does  not  present  a  situation  under  which  the  United 
States  would  gain  any  advantage  by  postponing  its  settlement  until  after  the 
canal  is  opened.  If  it  should  finally  appear  that  under  the  treaty  the  United 
States  was  not  entitled  to  impose  tolls  upon  British  vessels  when  United  States 
vessels  are  not  subjected  to  the  same  treatment.  Great  Britain  would  have  a 
claim  against  the  United  States  for  the  amount  of  the  tolls  improperly  paid  by 
British  vessels.  Clearly,  therefore,  it  is  not  a  case  where  an  immediate  settle- 
ment is  necessary  in  order  to  prevent  an  irreparable  injury,  for  there  can  be 
no  irreparable  injury  in  enforcing  a  law  when  the  damages  can  be  measured 
by  the  payment  of  money  improperly  collected.  Obviously  it  would  be  more 
convenient  for  the  United  States  to  have  this  question  determined  before  the 
canal  is  opened  and  before  tolls  are  collected,  which  would  have  to  be  re- 
funded if  this  question  should  be  decided  against  the  United  States;  but  even 
if  it  should  be  so  decided,  either  before  or  after  the  canal  is  opened,  in  either 
case  it  would  remnin  for  the  United  States  alone  to  determine  whether  equality 
of  treatment  should  be  secured  by  imposing  equal  tolls  upon  American  vessels 
or  by  exempting  British  vessels  equally  with  the  American  vessels  from  the 
payment  of  tolls. 

The  fundamental  question  underlying  this  controversy  is  whether  or  not 
the  rules  adopted  by  the  United  States  under  article  3  of  the  Hay-Pauncefote 
treaty  "  as  the  basis  of  the  neutralization  of  the  canal"  were  intended  to  apply 
to  the  United  States  as  well  as  to  other  nations. 

If  these  rules  are  understood  as  not  applying  to  the  United  States,  then  their 
adoption  by  the  United  States  is  nothing  more  than  a  declaration  of  policy  to 
the  effect  that  the  United  States  will  so  regulate  and  manage  the  canal,  under 
the  authority  reserved  in  Article  II,  as  to  insure,  in  accordance  with  the  first 
of  these  rules,  that  "  the  canal  shall  be  free  and  open  to  the  vessels  of  commerce 
and  of  war  of  all  nations  observing  these  rules,  on  terms  of  entire  equality,  so 
that  there  shall  be  no  discrimination  against  any  such  nation,  or  its  citizens 
or  subjects,  in  respect  of  the  conditions  or  charges  of  traffic,  or  otherwise," 
and  also  that  "such  conditions  and  charges  of  traffic  shall  be  just  and 
equitable." 

This  is  the  interpretation  which  the  Government  of  the  United  States  has 
accepted  as  expressing  the  true  intent  and  meaning  of  this  treaty,  the  effect 
of  which  under  this  interpretation  has  been  aptly  described  as  insuring  to  other 
nations  "  conditional  favored-nation  treatment,  the  measure  of  which,  in  the 
absence  of  express  stipulations  to  that  effect,  is  not  what  the  United  States 
give?  to  its  own  nationals,  but  the  treatment  which  it  gives  to  other  nations." 

Great  Britain,  on  the  other  hand,  although  apparently  admitting  that  none 
of  the  other  rules  adopted  by  the  United  States  as  the  basis  of  neutralization 
apply  to  the  United  States,  nevertheless  contends  that  the  first  of  these  rules 
does  apply  to  the  United  States  as  well  as  to  other  nations,  and  that  by  adopt- 
ing it  the  United  States  has  imposed  upon  itself  an  obligation  to  treat  its 
own  vessels  and  the  vessels  of  any  nation  observing  these  rules  on  terms  of 
entire  equality,  "  so  that  there  shall  be  no  discrimination  against  any  such 
nation,  or  its  subjects  or  citizens,"  etc.  In  contending  for  this  interpretation, 
however,  Great  Britain  has  recognized  the  necessity  for  determining  what  con- 
stitutes discrimination  and  particularly  whether  or  not  inequality  of  treatment 
in  favor  of  vessels  of  war  of  the  United  States  and  of  vessels  of  commerce 
engaged  in  the  coasting  trade  of  the  United  States  would  constitute  discrimina- 
tion against  British  vessels  under  this  clause. 

So  far  as  other  nations  are  concerned  the  British  position  is  understood  to  be 
that  this  clause  "  embodies  a  promise  on  the  part  of  the  United  States  that  the 
ships  of  all  nations  which  observe  the  rules  will  be  admitted  to  similar  privi- 
leges "  as  enjoyed  by  the  ships  of  the  United  States  and  Great  Britain. 

In  support  of  the  British  contention  that  the  words  "  all  nations  observing 

these  rules."  as  used  in  Rule  I,  include  the  United  States,  and  therefore  that 

British  vessels  using  the  canal  are  entitled  to  equal  treatment  with  those  of 

the  United  States,  the  only  argument  advanced  by  Great  Britain  is  that  the 

95272—12090 


112 

general  principle  of  neutralization  established  by  Article  VIII  of  the  Clayton- 
Bulwer  treaty,  as  the  basis  of  which  principle  the  United  States  adopted  these 
rules,  is  in  effect  nothing  more  than  a  general  principle  of  equality  of  treatment. 
Before  taking  up  this  argument  it  is  necessary  to  examine  briefly  the  provi- 
sions of  Article  VIII  of  the  Clayton-Bulwer  treaty,  and  trace  their  connection 
with  the  present  treaty.  Article  VIII  of  the  Clayton-Bulwer  treaty  recites : 

The  Governments  of  the  United  States  and  Great  Britain  having  not  only  desired,  in 
entering  into  this  convention,  to  accomplish  a  particular  object,  but  also. to  establish  a 
general  principle,  they  hereby  agree  to  extend  their  protection  by  treaty  stipulations,  to 
any  other  practicable  communications,  whether  by  canal  or  railway,  across  the  isthmus 
which  connects  North  and  South  America. 

The  first  seven  articles  of  that  treaty  related  exclusively  to  interoceamV 
communications  across  Central  America,  and  it  was  distinctly  understood  by 
Great  Britain  in  making  that  treaty  that  the  Isthmus  of  Panama  was  not  re- 
garded as  a  part  of  Central  America.  This  article  of  the  treaty,  therefore  is  the 
only  part  of  the  treaty  which  had  any  relation  to  a  canal  across  the  Isthmus 
of  Panama.  The  significance  of  this  is  that  this  article  expressed  the  only 
rights  Great  Britain  ever  had  in  relation  to  the  Panama  Canal  route,  so  that 
Great  Britain  has  actually  sacrificed  nothing  by  abrogating  the  rest  of  the  Clay- 
ton-Bulwer treaty.  In  other  words  if  the  Clayton-Bulwer  treaty  was  in  force 
to-day  Article  VIII  is  the  only  part  of  it  which  would  apply  to  the  Panama 
Canal,  and  so  far  as  the  effect  of  Article  VIII  has  been  changed  by  the  Hay- 
Pauncefote  treaty,  it  will  be  found  that  these  changes  have  been  made  at 
Great  Britain's  suggestion. 

The  article  then  continues: 

In  granting,  however,  their  joint  protection  to  any  such  canals  or  railways  as  are  by 
this  article  specified,  it  is  always  understood  by  the  United  States  and  Great  Britain 
that  the  parties  constructing  or  owning  the  same  shall  impose  no  other  charges  or  con- 
ditions of  traffic  thereupon  than  the  aforesaid  Governments  shall  approve  of  as  just  and 
equitable  ;  and  that  the  same  canals  or  railways,  being  open  to  the  citizens  and  subjects 
of  the  United  States  and  Great  Britain  on  equal  terms,  shall  also  be  open  on  like  terms 
to  the  citizens  and  subjects  of  every  other  State  which  is  willing  to  grant  thereto  such 
protection  as  the  United  States  and  Great  Britain  engage  to  afford. 

It  is  evident  from  this  clause  of  the  article  that  the  agreement  to  extend  pro- 
tection was  a  conditional  one,  and  the  condition  was  that  charges  imposed  on 
traffic  should  be  approved  by  both  Governments  as  just  and  equitable,  and  that 
the  canal  should  be  open  to  their  citizens  and  subjects  upon  equal  terms. 

It  is  clear  that  the  right  to  equal  treatment  went  hand  in  hand  with  the 
obligation  to  extend  protection,  but  the  general  principle  established  by  this 
article  related  primarily  to  the  protection  of  the  canal,  the  object  being  to 
secure  its  neutralization,  and  as  an  inducement  to  granting  protection  it  was 
provided  that  equality  of  treatment  should  go  with  it.  Clearly  neutralization 
as  used  there  meant  exemption  from  interference,  and  equality  of  treatment 
was  only  incidental  as  an  inducement  to  noninterference. 

That  both  Governments  understood  that  neutralization  rather  than  equality 
of  treatment  was  the  general  principle  adopted  by  Article  VIII  of  the  Clayton- 
Bulwer  treaty  is  evident  from  the  fact  that  the  preamble  of  the  Hay-Paunce- 
fote  treaty  of  1901,  as  well  as  the  preamble  of  the  earlier  treaty  of  1900, 
characterized  that  general  principle  as  "the  general  principle  of  neutralization 
established  in  Article  VIII  of  that  convention."  The  connection  established  by 
Article  VIII  of  that  convention  between  the  obligation  to  protect  the  canal  and 
the  right  to  equal  treatment  is  also  recognized  and  carried  into  the  first  Hay- 
Pauncefote  treaty  of  1900  by  the  second  article  of  that  treaty,  which  provides : 

The  high  contracting  parties,  desiring  to  preserve  and  maintain  the  "  general  prin- 
ciple "  of  neutralization  "established  in  Article  VIII  of  the  Clayton-Bulwer  convention, 
adopt  as  the  basis  of  such  neutralization  the  following  rules,  etc. 

The  first  of  these  rules  is  as  follows: 

The  canal  shall  be  free  and  open,  in  time  of  war,  as  in  time  of  peace,  to  the  vessels 
of  commerce  and  of  war  of  all  nations  on  terms  of  entire  equality,  so  that  there  shall  be 
no  discrimination  against  any  nation  or  its  citizens  or  subjects  in  respect  of  the  condi- 
tions or  charges  of  traffic,  or  otherwise. 

It  will  be  observed  that  in  this  treaty  Great  Britain  joined  with  the  United 
States  in  adopting  rules  which  were  to  furnish  the  basis  of  neutralization,  so 
that  in  that  case  both  Governments  were  equally  committed  to  the  neutraliza- 
tion of  the  canal,  and  the  rules  recognized  that  in  consequence  of  such  joint 
obligation  the  vessels  of  both  Governments  were  entitled  to  equal  treatment. 

95272—12090 


113 

As  part  of  this  policy  of  coupling  equal  treatment  with  the  obligation  of  pro- 
tection, that  treaty  also  provided  in  article  3  that — 

The  -high  contracting  "parties  will,  immediately,  upon  the  exchange  of  the  ratifications 
of  this  convention,  bring  it  to  the  notice  of  the  other  powers  and  invite  them  to  adhere 
to  it. 

That  treaty,  it  will  be  remembered,  was  rejected  by  the  United  States  Senate, 
and  was  subsequently  amended  materially  before  it  was  agreed  upon  in  its 
present  form.  Certain  of  these  amendments  are  of  the  utmost  significance  in 
connection  with  the  questions  under  consideration,  and  show  conclusively  that 
the  policy  which  had  previously  been  adopted  with  respect  to  the  protection  of 
the  canal  was  completely  reversed  by  the  later  treaty.  The  article  of  the  ear- 
lier treaty  requiring  the  two  parties  to  bring  it  to  the  notice  of  other  powers 
and  to  invite  them  to  adhere  to  it  was  entirely  omitted  from  the  new  treaty. 
This  provision  had  been  objected  to  by  the  Senate,  and  was  omitted  for  that 
reason,  and  in  consequence  of  its  omission  Great  Britain  insisted  upon  being 
relieved  from  the  obligation  of  protecting  the  canal,  which  it  had  assumed  in 
joining  with  the  United  States  in  adopting  the  rules  of  neutralization.  The 
reason  for  relieving  Great  Britain  of  this  obligation  is  found  in  a  statement 
made  by  Lord  Lansdowne  in  an  instruction  by  him  to  Lord  Pauncefote  in  the 
course  of  the  negotiations  wherein  he  says,  in  effect,  that  the  amendment  strik- 
ing out  the  provision  for  the  adherence  of  other  powers  leaves  the  neutrality 
of  the  canal  dependent  upon  the  guaranty  of  the  two  contracting  powers,  which 
would  place  Great  Britain  at  a  marked  disadvantage  in  comparison  with  other 
powers  which  would  not  be  subjected  to  the  self-denying  ordinances  which  Great 
Britain  is  desired  to  accept.  Accordingly  the  treaty  was  further  amended  so 
that  the  United  States  alone,  instead  of  the  United  States  and  Great  Britain 
jointly,  adopted  the  rules  of  neutralization,  and  that  this  change  was  intended 
to  relieve  Great  Britain  of  any  obligation  to  protect  the  canal  is  evident  from 
the  position  taken  by  the  British  Government  in  the  recent  diplomatic  corre- 
spondence, in  the  course  of  which  it  is  stated : 

It  certainly  was  not  the  intention  of  His  Majesty's  Government  that  any  responsi- 
bility for  the  protection  of  the  canal  should  attach  to  them  in  the  future. 

In  this  connection  it  will  be  remembered  that  the  Hay-Panncefote  treaty  was 
entered  into  pursuant  to  article  8  of  the  Clayton-Bulwer  treaty,  whereby, 
in  order  to  establish  a  general  principle,  they  agreed  "  to  extend  their  protec- 
tion by  treaty  stipulations  to  any  other  practicable  communications  "  which  in- 
cluded the  Panama  Canal  as  now  constructed.  The  obligation  to  protect,  as 
has  already  been  shown,  was  conditional  upon  equality  of  treatment,  and  Great 
Britain's  repudiation  of  responsibility  for  the  protection  of  the  canal  would 
seem  to  be  wholly  inconsistent  with  the  stipulations  of  article  8  above  men- 
tioned, unless  it  was  understood  that  Great  Britain  was  not  to  receive  equal 
treatment  with  the  United  States  under  the  new  treaty. 

The  changes  by  which  the  United  States  alone  adopted  the  rules,  and  thereby 
undertook  the  whole  responsibility  of  upholding  them  and  maintaining  the 
neutralization  of  the  canal,  made  some  changes  in  the  rules  themselves  neces- 
sary. It  appears  from  the  diplomatic  negotiations  which  resulted  in  the  second 
TIay-Paimeefote  treaty  that  in  order  to  make  rule  1  conform  to  the  situatioo 
resulting  from  the  amendments  above  noted  Great  Britain  had  suggested  that 
in  rule  1,  after  the  words  "all  nations,"  there  should  be  inserted  the  words 
"  which  shall  agree  to  observe  these  rules,"  so  that  rule  1  would  then  read: 

The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
\vhich  shall  agree  to  observe  these  rules. 

Clearly  the  United  States,  as  the  Nation  which  adopted  the  rules,  was  the 
Nation  with  which  the  agreement  to  observe  them  would  necessarily  be  made, 
and  therefore  it  is  evident  that  in  proposing  this  amendment  Great  Britain 
understood  that  as  a  result  of  the  proposed  amendments  the  United  States,  as 
the  Nation  adopting  these  rules,  would  stand  apart  from  all  other  nations,  and 
that  "  all  nations  "  referred  to  in  these  rules  did  not  include  the  United  States. 
The  exact  form  of  amendment  thus  proposed  was  not  agreed  upon,  but  instead 
of  the  words  "  all  nations  which  shall  agree  to  observe  these  rules  "  the  words 
"  all  nations  observing  these  rules "  were  substituted.  With  reference  to  this 
change.  Lord  Lansdowne  made  the  following  statement  in  the  course  of  the 
negotiations : 

His  Majesty's   Government   were   prepared  to   accept  this  amendment  which   seemed   to 
u ...  equally  efficacious  for  the  purpose  which  we  had  in  view,  namely,  that  of  insuring  that 
051272°— 12090 8 


114 

Great  Britain  should  not  be  placed  in  a  less  advantageous  position  than  other  powers, 
when  they  [the  United  States]  stopped  short  of  conferring  upon  other  nations  a  con- 
tractual right  to  the  use  of  the  canal. 

Having  thus  briefly  reviewed  the  development  of  tlie  policy  of  neutralization 
as  established  in  article  8  of  the  Clayton-Bulwer  treaty  and  as  understood 
by  the  parties  in  the  later  negotiations  resulting  in  the  second  Hay-Pauncefote 
treaty,  it  is  convenient  now  to  examine  the  argument  which  has  been  advanced 
by  Great  Britain  to  show  that  the  policy  of  neutralization  adopted  by  the 
United  States  in  this  treaty  imposes  upon  the  United  States  the  obligation  to 
treat  British  and  United  States  vessels  upon  equal  terms  in  the  use  of  the  canal. 
The  argument,  briefly,  is  that  the  word  "  neutralization."  as  used  in  article  8, 
has  the  same  sense  as  in  the  preamble  of  the  treaty  which  recites  that  both 
Governments  are  desirous  of  facilitating  the  construction  of  the  canal  "  without 
impairing  the  l  general  principle '  of  neutralization  established  in  article  8  '* 
of  the  Clayton-Bulwer  treaty,  which  policy  of  neutralization  is  admitted  to 
have  comprehended  both  equality  of  treatment  and  the  obligation  to  protect  the 
canal,  and  that  inasmuch  as  Great  Britain  has  now  been  relieved  from  any 
responsibility  for  the  protection  of  the  canal,  neutralization  must  therefore  refer 
in  the  treaty  to  a  system  of  equal  rights ;  therefore  the  United  States  can  have 
no  more  rights  than  other  nations,  and  consequently  is  one  of  the  nations  re- 
quired to  observe  the  rules  adopted  by  the  United  States,  so  that  Great  Britain 
and  the  United  States  are  in  the  same  situations,  and  British  vessels  are 
entitled  to  equal  treatment  with  the  vessels  of  the  United  States. 

As  stated  at  the  outset,  it  is  not  the  purpose  of  this  paper  to  weigh  the  value 
of  the  arguments  advanced  on  either  side,  but  in  any  event  it  would  be  prema- 
ture to  attempt  to  deal  fully  with  the  arguments  on  this  point,  because  the  Gov- 
ernment of  the  United  States  has  not  as  yet  stated  the  arguments  relied  upon 
to  support  the  position  which  it  has  taken  in  opposition  to  the  British  conten- 
tions. The  reply  of  the  Government  of  the  United  States  to  the  British  argu- 
ment so  far  has  been  confined  to  the  statement  by  Secretary  Knox,  in  the  recent 
correspondence  on  the  subject,  that — 

This  Government  does  not  agree  with  the  interpretation  placed  by  Sir  Edward  Grey 
upon  the  Hay-Pauncefote  treaty,  or  upon  the  Clayton-Bulwer  treaty,  but  for  reasons 
which  appear  hereinbelow  it  is  not  deemed  necessary  at  present  to  amplify  or  reiterate 
the  views  of  this  Government  upon  the  meaning  of  those  treaties. 

The  conclusion  reached  by  Great  Britain,  as  above  stated,  that  the  same 
treatment  extended  to  American  vessels  should  be  extended  to  British  ves.-;nls. 
has  been  made  the  basis  by  Great  Britain  for  objecting  to  certain  features  of 
the  Panama  Canal  act  adopted  by  Congress  last  year ;  and  the  views  of  the 
British  Government  in  support  of  these  objections  have  been  fully  presented  in 
the  recent  diplomatic  correspondence. 

It  appears  from  this  correspondence  that  apart  from  a  reservation  made  by 
Great  Britain  of  the  right  to  examine  further  one  provision  of  the  act  and  to 
raise  such  contentions  as  may  seem  justified  only  three  objections  are  made, 
which  may  be  briefly  stated  as  follows : 

(1)  That  under  the  act  no  tolls  are  to  be  levied  upon  ships  engaged  in  the 
coastwise  trade  of  the  United  States. 

(2)  That  the  act  appears  to  confer  upon  the  President  authority  in  fixing 
tolls  to  discriminate  in  favor  of  ships  belonging  to  the  United  States  and  its 
citizens  as  against  foreign  ships. 

(3)  That  the  act  exempts  from  the  payment  of  tolls  the  vessels  of  the  Re- 
public of  Panama,  pursuant  to  the  provisions  of  article  19  of  the  treaty  of 
1903  between  the  United  States  and  Panama. 

The  reply  of  the  United  States  to  these  objections  has  been  fully  stated  in 
Mr.  Knox's  note  on  the  subject,  dated  the  17th  of  January  last.  It  appears  from 
that  note  that  the  position  of  the  United  States  with  reference  to  the  third  of 
the  objections  above  enumerated  is  that,  for  reasons  which  depend  upon  consid- 
erations outside  of  the  terms  of  the  treaty,  this  question  is  one  which  must  be 
settled  between  the  two  Governments  independently  of  the  treaty  provisions. 
The  correspondence  does  not  fully  disclose  what  these  reasons  are,  but  ap- 
parently they  rest  upon  some  previous  discussion  and  understanding  between  the 
two  Governments  with  regard  to  the  subject  which  have  not  yet  been  made 
public,  and  it  is  therefore  impossible  to  discuss  here  the  arguments  in  support 
of  the  position  of  either  Government  on  this  point. 
95272—12090 


115 

With  reference  to  the  other  two  objections,  the  United  States  has  taken  the 
position  that  if  it  is  right  in  its  contention  that  Rule  I  does  not  apply  to  Amer- 
ican vessels,  then  the  exemption  from  tolls  of  its*  coastwise  trade  and  its  ships 
of  \var  and  even  its  ships  of  commerce  engaged  in  foreign  trade  would  not  he 
contrary  to  its  treaty  obligation.  As  has  already  been  stated,  the  argument  of 
the  United  States  in  support  of  this  position  has  not  as  yet  been  presented,  be- 
cause it  appeared  to  the  Government  of  the  United  States  that  even  if  Rule  I 
should  be  regarded  as  applying  to  American  vessels,  nevertheless  Great  Britain 
had  failed  to  show  that  under  the  provisions  of  the  canal-tolls  act  and  the 
President's  proclamation  there  was  or  wrould  be  any  discrimination  against 
British  vessels. 

In  regard  to  the  objection  that  under  the  act  the  President  had  discretion  to 
discriminate  in  favor  of  ships  of  the  United  States  or  its  citizens,  the  reply  of 
the  United  States  was  that  this  as  yet  had  not  been  done,  and  that  it  would  be 
premature  to  discuss  that  question  so  long  as  it  rested  merely  on  a  possibility 
of  what  might  happen  rather  than  upon  an  announced  intention  to  discriminate, 
or  some  specific  act  of  discrimination. 

In  this  connection  the  United  States  raised  the  question  of  whether  the  ob- 
jection under  consideration  was  to  be  understood  as  applying  to  war  vessels 
and  Government  vessels  of  the  United  States,  and  the  British  position  on  this 
question  has  not  yet  been  announced.  The  significance  of  this  question  is  that 
if  Great  Britain  admits  that  Rule  I  does  not  apply  to  United  States  war  vessels 
it  amounts  to  an  admission  that  it  does  not  apply  to  United  States  vessels  of 
commerce,  for  vessels  of  war  and  vessels  of  commerce  are  put  on  precisely  the 
same  footing  in  Rule  I.  Clearly,  howrever,  there  is  no  point  in  collecting  tolls 
from.  United  States  vessels  of  war,  inasmuch  as  their  payment  would  be  merely 
a  matter  of  bookkeeping  in  the  Government 'accounts.  Moreover,  Great  Britain 
has  already  admitted  that  the  rest  of  the  rules  adopted  by  the  United  States  in 
article  3,  which  chiefly  relate  to  war  conditions,  do  not  apply  to  the  United 
States,  and  it  is  perhaps  difficult  for  Great  Britain  to  establish  a  distinction 
justifying  the  application  of  Rule  I  to  the  United  States  and  the  application  of 
the  rest  of  the  rules  only  to  other  nations. 

In  reply  to  the  first  objection — that  under  the  act  no  tolls  are  to  be  levied 
upon  ships  engaged  in  the  coastwise  trade  of  the  United  States — the  position 
taken  by  the  Government  of  the  United  States  was  that,  in  view  of  the  fact 
that  no  foreign  vessels  wrere  permitted  to  engage  in  the  coastwise  trade  of  the 
United  States,  an  exemption  of  American  vessels  engaged  in  that  trade  was  in 
no  sense  a  discrimination  against  foreign  vessels  so  long  as  this  exemption  was 
restricted  to  bona  fide  coastwise  trade.  Great  Britain  has  admitted  that  the 
United  States  is  at  liberty  to  grant  a  subsidy  to  its  vessels  whether  engaged  in 
coastwise  or  foreign  trade,  and  apparently  has  admitted  in  principle  that  a 
subsidy  may  be  granted  indirectly  by  an  exemption  from  the  payment  of  tolls 
if  that  should  be  done  without  producing  an  increase  in  the  rate  of  tolls  im- 
posed upon  British  vessels ;  but  it  is  contended  by  Great  Britain  that  "  if  any 
classes  of  vessels  are  exempted  from  tolls  in  such  a  way  that  no  receipts  from 
such  ships  are  taken  into  account  in  t*he  income  of  the  canal  there  is  no  guar- 
anty that  the  vessels  upon  which  tolls  are  being  levied  are  not  being  made  to 
bear  more  than  their  fair  share  of  the  upkeep." 

In  making  this  contention  the  British  Government  apparently  was  under 
the  impression  that  the  President,  in  determining  the  rate  of  tolls,  would  not 
t;'ke  into  account  the  tonnage  of  American  coastwise  vessels,  and  therefore  that 
the  toll  rate  would  be  higher  than  if  those  vessels  were  subjected  to  the  pay- 
ment of  tolls.  That  the  British  Government  was  under  a  misapprehension  with 
regard  to  this  matter  has  been  clearly  shown  by  the  reply  of  the  United  States, 
which  pointed  out  "that  the  tolls  which  would  be  paid  by  American  coast- 
wise vessels  but  for  the  exemption  contained  in  the  act  were  computed  in  de- 
termining the  rate  fixed  by  the  President,"  and  the  figures  are  given  showing 
that  the  estimated  net  tonnage  upon  which  the  tolls  fixed  in  the  President's 
proclamation  were  based  included  the  tonnage  of  American  coastwise  vessels. 

For  these  reasons  the  Government  of  the  United  States  contended  that  there 
had  as  yet  been  no  discrimination,  and  that  there  was  nothing  in  the  situation 
to  show  that  the  United  States  intended  to  discriminate  against  British  vessels, 
either  by  subjecting  them  to  inequality  of  treatment  or  by  imposing  upon  them, 
unjust  and  inequitable  tolls, 
95272 — 12000 


116 

From  the  foregoing  brief  outline  of  the  issues  and  arguments  presented  in 
the  diplomatic  discussion  of  this  controversy  it  will  be  seen  that  it  is  still  an 
open  question  as  to  whether  the  two  Governments  can  not  harmoniously  settle 
their  differences  with  regard  to  this  treaty  without  resorting  to  arbitration. 
Great  Britain  has  proposed  arbitration,  and  the  United  States  has  not  as  yet 
accepted  that  suggestion,  but  it  has  not  refused  to  do  so,  having  taken  the  'po- 
sition that  the  issues  between  the  two  countries  should  first  be  more  clearly  de- 
fined, and  that  arbitration  at  present  would  be  premature,  because  the  contro- 
versy has  not  yet  passed  beyond  the  stage  when  it  could  profitably  be  dealt  with 
by  diplomatic  negotiation. 

To  sum  up  the  whole  situation,  the  United  States  and  Great  Britain  differ 
as  to  the  meaning  and  effect  of  the  treaty  in  its  relation  to  certain  features  of 
the  Panama  Canal  act.  Great  Britain  has  asked  that  these  differences  should 
be  settled  by  arbitration,  and  the  United  States  has  replied  that  there  is  as  yet 
no  necessity  for  resorting  to  arbitration,  for  even  tinder  Great  Britain's  'in- 
terpretation of  the  treaty  it  is  believed  that  they  have  failed  to  make  out  a  case 
showing  any  violation  of  treaty  obligations.  In  other  words,  the  United  States 
in  effect  has  interposed  a  demurrer  to  the  British  complaint  and  contended  that 
even  under  the  British  interpretation  of  the  Hay-Pauncefote  treaty  the  provi- 
sions of  the  Panama  Canal  act,  when  taken  in  conjunction  with  the  President's 
proclamation,  are  not  in  conflict  with  that  treaty;  and  that  the  objections 
advanced  by  Sir  Edward  Grey  do  not  present  any  questions  which,  under  the 
terms  of  our  arbitration  treaty  with  Great  Britain,  can  fairly  be  regarded  as 
requiring  submission  to  arbitration  at  the  present  stage  of  the  discussion. 


[From  Senate  Document  No.  2,  Sixty-third  Congress,  special  session.] 

THE  PANAMA  CANAL— SHALL  IT  BE  AMERICAN  OB  ANGLO- 
AMERICAN? 

(Article  by   Samuel   Seabury,  justice  of  the   Supreme  Court  of  the   State  of  New   York, 
printed  in  the  Outlook  on  March  8,  1913.) 

"  I  commend  an  American  canal,  on  American  soil,  to  the  American  people.''  (Gen. 
Grant.)  . 

"  The  policy  of  this  country  is  a  canal  under  American  control.  The  United  Slates  can 
not  consent  to  surrender  this  control  to  any  European  power."  (President  Hayes.) 

Introduction. 

As  early  as  1550  the  idea  of  a  canal  which  should  unite  the  waters  of  the 
Atlantic  and  of  the  Pacific  was  publicly  discussed.  From  that  time  until  the 
present  idealists  have  dreamed  and  statesmen  have  struggled  to  bring  about 
its  realization.  Difficulties — physical,  financial,  and  political — have  barred  the 
pathway  which  led  to  achievement.  The  treaty  which  the  United  States  made 
with  the  Republic  of  Panama  removed  the  legal  and  political  obstacles  in  the 
way  of  commencing  the  task  which  had  been  so  long  in  contemplation.  Since 
that  time  the  United  States  has  acted  with  characteristic  energy.  One  of  the 
greatest  engineering  achievements  of  mankind  is  being  carried  to  a  successful 
conclusion.  The  cost  of  the  canal  to  the  Government  of  the  United  States  will 
exceed  ,$400,000,000.  In  the  near  future  vessels  of  commerce  will  pass  through 
the  canal  from  the  Atlantic  to  the  Pacific.  It  is  estimated  that  within  a  year 
from  the  time  it  is  opened  a  net  tonnage  of  over  10,000,000  tons  will  use  the 
canal.  Of  this  tonnage,  not  quite  one-quarter  will  be  engaged  in  American 
coastwise  trade.  The  Panama  route  will  have  a  monopoly  of  the  traffic  of 
Hawaii  and  of  the  west  coast  of  North  and  South  America,  with  the  exception 
of  a  small  part  of  the  trade  of  southern  Chile,  although  it  must  compete  with 
other  routes  for  the  large  and  valuable  commerce  of  Pacific  Asia  and  of  Aus- 
tralia. The  canal  will  decrease  the  distance  from  New  York  to  San  Francisco 
about  8,500  miles,  and  from  New  York  to  Australia  about  4,000  miles.  The  sav- 
ing in  time  for  a  vessel  of  9  knots  speed  from  New  York  to  Iquique,  Chile,  one  of 
the  ports  from  which  the  heavy  nitrate  shipments  are  made,  will  be  over  23 
days.  The  trip  from  Liverpool  to  Iquique  will  be  decreased  nearly  3,000  miles. 
The  saving  of  time  and  money  which  will  result  to  those  engaged  in  the  world's 
commerce  by  the  use  of  the  Panama  Canal  can  not  be  calculated. 
95272—12000 


117 

The  Panama  Canal  is  the  achievement  of  the  United  States  alone.  No  other 
nation  has  aided  in  its  creation.  In  August,  1912,  the  act  of  Congress  making 
provision  for  the  permanent  government  of  the  Canal  Zone  became  a  law.  The 
law  exempts  coastwise  trade  from  tolls.  This  comparatively  unimportant  pro- 
vision and  the  provisions  of  the  law  which  deny  the  right  to  use  the  canal  to 
vessels  owned  by  railway  companies  and  those  violating  the  provisions  of  the 
Sherman  antitrust  law  have  been  made  the  basis  of  a  formal  protest  by  Great 
Britain  on  the  ground  that  they  are  in  conflict  with  the  Hay-Pauncefote  treaty. 
That  protest  raises  questions  of  the  utmost  importance.  The  manner  in  which 
those  questions  shall  be  determined  will  profoundly  affect  the  commercial  de- 
velopment and  national  integrity  of  the  United  States. 

The  History  of  the  Canal. 

A  brief  history  of  the  Panama  Canal  is  essential  to  an  understanding  of  the 
present  controversy.  In  1846  a  treaty  was  entered  into  between  the  United 
States  and  Colombia,  then  called  New  Granada.  The  treaty  gave  to  the  United 
States  a  right  of  transit  over  the  Isthmus  of  Panama  "  from  the  one  to  the  other 
sea."  The  Panama  Railroad,  which  was  completed  in  1855,  was  a  result  of 
this  treaty.  In  1849  the  United  States  entered  into  a  treaty  with  Nicaragua 
which  provided  for  the  construction  of  a  ship  canal  from  Greytown  (San 
Juan),  on  the  Atlantic  coast,  to  the  Pacific  coast  by  way  of  the  Lake  of  Nica- 
tagua.  Great  Britain,  claiming  a  protectorate  over  the  Mosquito  Indians,  in 
whose  territory  the  Atlantic  end  would  be  placed,  insisted  that  it  alone  should 
dictate  the  terms  upon  which  the  Nicaragua  route  should  be  opened.  The 
British  claim  was  in  defiance  of  the  Monroe  doctrine  and  without  moral  or 
legal  basis, 

Mr.  Lawrence,  United  States  minister  at  London,  presented  the  protest  of  his 
Government.  It  was  ignored.  Sir  Henry  Bulwer,  the  British  minister  at 
Washington,  realizing  that  Mr.  Clayton,  the  Secretary  of  State  in  President 
Zachary  Taylor's  Cabinet,  had  been  alarmed  by  other  acts  of  British  aggres- 
sion involving  the  seizure  of  Tigre  Island,  ignored  Mr.  Lawrence  and  concluded 
the  Claytoii-Bulwer  treaty  directly  with  Mr.  Clayton.  This  treaty  was  ratified 
July  5,  1850.  The  treaty  provided  that  neither  Great  Britain  nor  the  United 
States  should  ever  obtain  or  maintain  for  itself  any  exclusive  control  over  the 
canal  or  erect  fortifications  upon  it,  nor  occupy  or  exercise  any  dominion  over 
any  part  of  Central  America ;  and  that  in  the  event  of  war  the  vessels  of  Great 
Britain  or  the  United  States  must  be  permitted  to  pass  unmolested,  and  that 
both  parties  should  guard  the  safety  and  preserve  the  neutrality  of  the  canal. 
The  treaty  also  provided  that  the  parties  to  it  had  been  actuated  not  only  by 
the  desire  to  accomplish  a  particular  object,  "  but  also  to  establish  a  general 
principle,"  and  that  "  they  hereby  agree  to  extend  their  protection,  by  treaty 
stipulation,  to  any  other  practicable  communication,  whether  by  canal  or  rail- 
way, across  the  Isthmus  *  *  *  and  especially  to  interoceanic  communica- 
tions *  *  *  which  are  now  proposed  to  be  established  by  way  of  Tehuan- 
tepec  or  Panama." 

By  this  treaty  Great  Britain  tied  the  hands  of  the  United  States  and  reserved 
to  herself  the  absolute  power  of  obstruction.  It  is  unnecessary  to  comment 
upon  the  opposition  which  the  American  people  manifested  to  this  treaty  or  to 
trace  the  many  diplomatic  controversies  which  arose  in  regard  to  it  or  to  note 
the  forcible  objections  which  Seward,  Evarts,  and  Blaine  felt  compelled  to 
make  to  it.  The  significant  fact  to  be  here  noted  is  that  until  the  treaty  was 
superseded  in  1901  it  presented  a  complete  bar  to  the  efforts  of  the  United  States 
to  secure  the  building  of  the  canal. 

In  1878  the  Wyse  concession  was  made  by  Colombia,  and  subsequently  a 
French  construction  company  was  organized  under  the  presidency  of  Ferdinand 
de  Lesseps  to  build  the  Panama  Canal.  The  prospect  of  the  canal  under  French 
control  was  cause  for  alarm  in  the  United  States.  In  a  special  message  to  Con- 
gress, March  8,  1880,  President  Hayes  asserted  that  the  policy  of  the  United 
States  required  a  canal  under  American  control.  Mr.  Blaine,  in  language  so 
forcible  as  not  to  permit  of  misunderstanding,  pointed  out  that  the  passage  of 
the  armed  vessels  of  a  hostile  nation  through  the  Panama  Canal  would  be  no 
more  admissible  than  the  passage  of  armed  forces  of  a  hostile  nation  over  the 
railway  lines  joining  the  Atlantic  and  the  Pacific  shores  of  the  United  States. 
The  French  Government  gave  the  United  States  its  assurance  than  it  did  not 
aim  at  political  control,  and  expressed  "its  firm  purpose  to  allow  the  character 

05272—12090 


118 

of  the  enterprise  inaugurated  by  M.  cle  Lessens  to  remain  an  essentially  pri- 
vate one."  (See  the  "Treaty  regulations  of  the  United  States  and  Colombia," 
by  John  H.  Latane,  Ph.  D.,  Annals  of  the  American  Academy  of  Political  Sci- 
ence, 1903.)  The  failure  of  the  French-  company  in  1888  permanently  defeated 
the  efforts  of  M.  de  Lesseps,  and  the  hope  that  the  canal  would  be  built  was 
again  deferred. 

On  November  18,  1901,  the  Hay-Pauncefote  treaty  was  concluded.  It  recites 
the  desire  of  the  United  States  and  Great  Britain  to  facilitate  the  construction 
of  a  ship  canal  "by  whatever  route  may  be  considered  expedient"  and  to 
remove  the  objections  arising  from  the  Clayton-Bulwer  treaty  without  impair- 
ing the  "  general  principle  of  neutralization  established  in  article  8  of  that 
convention." 

The  first  article  of  the  treaty  provided  that  it  should  supersede  the  Clayton- 
Bulwer  treaty.  The  second  article  provides  "  that  the  canal  may  be  constructed 
under  the  auspices  of  the  Government  of  the  United.  States,"  either  at  its  own 
cost  or  by  gift  or  loan  of  money  to  individuals  or  corporations  or  through  sub- 
scription to  or  to  purchase  of  stock  and  shares.  This  article  also  provides  that 
the  United  States  "  shall  have  and  enjoy  all  the  rights  incident  to  such  con- 
struction, as  well  as.  the  exclusive  right  of  providing  for  the  regulation  and 
management  of  the  canal." 

The  third  article  of  the  Hay-Pauncefote  treaty  deals  with  the  neutralization 
of  the  canal,  and  in  its  first  subdivision  provides  that  "  the  canal  shall  be  free 
and  open  to  the  vessels  of  commerce  and  of  war  of  all  nations  observing  these 
rules,  on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimination 
against  any  such  nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions 
or  charges  of  traffic  or  otherwise.  Such  conditions  and  charges  shall  be  just 
and  equitable." 

Article  4  of  the  treaty  provides  "  that  no  change  of  territorial  sovereignty  or 
of  international  relations  of  the  country  or  countries  traversed  by  the  before- 
mentioned  canal  shall  affect  the  general  principle  of  neutralization  or  the  obli- 
gation of  the  high  contracting  parties  to  the  present  treaty."  This  clause  was 
evidently  inserted  to  guard  against  the  treaty's  being  impaired  by  changes  in 
the  South  American  Republics,  but  it  did  not  contemplate  the  possibility  of 
the  United  States  acquiring  the  territory  through  which  the  canal  is  to  be 
pierced.  A  study  of  the  treaty  in  connection  with  the  convention  of  Constanti- 
nople and  with  a  full  understanding  of  the  circumstances  under  which  the  treaty 
was  made  shows  clearly  that  the  acquisition  of  the  canal  territory  by  the 
United  States  was  not  foreseen  by  either  of  the  contracting  parties.  It  should 
be  noted  that  nothing  contained  in  the  treaty  imposes  any  prohibition  upon 
either  of  the  contracting  parties  from  purchasing  territory  to  be  traversed  by 
the  -proposed  canal. 

On  January  20,  1902,  President  Roosevelt  sent  to  Congress  a  message  recom- 
mending the  construction  of  the  canal  at  Panama.  His  message  proposed  the 
purchase  of  the  French  rights  for  $40,000,000.  Congress  acted  upon  this  sug- 
gestion and  appropriated!  $170,000,000,  and  directed  the  President,  if  the  con- 
sent of  Colombia  could  not  be  obtained,  to  have  the  canal  constructed  by  the 
Nicaragua  route  at  a  cost  not  to  exceed  $180,000,000.  The  Hay-Herran  treaty 
between  the  United  States  and  Colombia  was  then  negotiated,  by  which  Co- 
lombia was  to  grant  the  desired  privilege  in  return  for  $10,000,000  and  an 
annual  rental  of  $250,000.  The  terms  of  this  proposed  treaty  had  been  agreed 
upon  between  the  accredited  representatives  of  the  United  States  and  Colombia, 
and  the  Senate  of  the  United  States  on  March  17,  1903,  ratified  the  proposed 
treaty.  The  Colombian  Government,  however,  sought  to  repudiate  the  promise 
of  its  representative,  and  indicated  that  it  would  ratify  the  treaty  if  it  was 
paid  $25^000,000.  When  the  United  States  refused  to  yield  to  this  demand 
Colombia  concluded  that  it  could  not  "constitutionally"  comply  with  its 
promise  to  ratify  the  treaty.  That  the  alleged  constitutional  objection  was  a 
mere  pretense  is  evident  from  tlie  fact  that  it  could  have  been  overcome  by  a 
payment  of  $15,000,000  more  than  the  United  States  had  agreed  to  pay  aiul 
Colombia  to  accept.  The  action  of  Colombia  in  causing  the  proposed  treaty  to 
fail  of  ratification  incensed  and  embittered  the  people  of  the  State  of  Panama, 
whose  interests  wrould  have  been  greatly  promoted  by  the  construction  of  the 
canal.  The  attitude  of  Colombia  served  to  intensify  the  spirit  of  revolt  among 
the  people  of  Panama,  who  for  many  years  had  been  treated  unjustly  by  the 
Colombian  Government.  This  last  act  of  Colombia  showed  such  a  total  dis- 
regard of  the  interests  of  the  people  of  Panama  and  was  instigated  by  motives 

95272—12090 


119 

so  sordid  and  odious  that  the  State  of  Panama  seceded  from  Colombia  and 
established  a  provisional  government.  Within  a  short  time  the  United  States, 
Great  Britain,  and  France  recognized  the  independence  of  the  new  Republic  of 
Panama.  • 

On  November  18,  1903,  M.  Bunau-Varilla,  the  accredited  representative  of 
Panama,  and  Secretary  Hay  signed  the  treaty  of  Panama,  which  was  duly 
ratified.  This  treaty  grants  the  United  States  in  perpetuity  a  zone  of  land  and1 
land  under  water  for  the  construction,  maintenance,  operation,  sanitation,  and 
protection  of  the  canal  of  the  width  of  10  miles,  beginning  in  the  Caribbean 
Sea  and  extending  to  and  across  the  Isthmus  of  Panama  into  the  Pacific  Ocean, 
with  the  exception  of  the  cities  of  Panama  and  Colon.  Certain  other  incidental 
territory  and  islands  are  also  granted.  The  treaty  grants  the  United  States 
"  all  the  rights,  power,  and  authority  "  within  the  zone  mentioned  "  which  the 
United  States  would  possess  and  exercise  if  it  were  the  sovereign  of  the  terri- 
tory within  which  the  said  lands  and  waters  are  located,  to  the  entire  exclusion 
of  the  Republic  of  Panama  of  any  such  sovereign  rights,  power,  and  authority." 
Article  5  of  this  treaty  grants  to  the  United  States  in  perpetuity  a  monopoly 
for  the  construction,  maintenance,  and  operation  of  any  system  of  communica- 
tion, by  means  of  canal  or  railway,  across  its  territory  between  the  Caribbean 
Sea  and  the  Pacific  Ocean.  In  return  for  this  grant  the  United  States  guaran- 
tees to  maintain  the  independence  of  the  Republic  of  Panama  and  to  pay 
Panama  $10,000,000,  and  from  nine  years  after  the  date  of  the  treaty  to  make 
an  annual  payment  of  $250,000  during  the  life  of  the  treaty.  The  eighteenth 
article  of  this  treaty  provides  that  "  the  canal,  when  constructed,  and  the 
entrances  thereto,  shall  be  neutral  in  perpetuity,  and  shall  be  opened  upon  the 
terms  provided  for  by  section  1  of  article  3  of  and  in  conformity  with  all  the 
stipulations  of  the  treaty  entered  into  by  the  Governments  of  the  United  States 
and  Great  Britain  on  November  18,  1901."  In  considering  this  provision  of  the 
Panama  treaty,  it  is  to  be  borne  in  mind  that  it  is  binding  only  upon  the  parties 
to  it.  That  treaty  prescribes  and  defines  the  correlative  rights  and  duties  of 
the  United  States  and  of  the  Republic  of  Panama.  It  does  not  enlarge  the 
rights  of  Great  Britain  in  reference  to  the  canal.  Great  Britain  was  not  a 
party  to  the  Hay-Varilla  treaty,  and  any  obligation  that  was  imposed  upon  the 
United  States  under  it  is  due  solely  to  the  Republic  of  Panama,  and  is  subject 
to  any  change  that  may  be  effected  by  mutual  consent  of  the  contracting  parties. 

This  historical  outline  makes  clear  the  steps  which  the  United  States  has 
taken  and  the  difficulties  which  it  has  finally  overcome.  The  territory  through 
which  the  canal  is  being  constructed  is  subject  solely  to  the  sovereignty  of  the 
United  States.  Now  that  the  United  States  has  done  everything  requisite  and 
necessary  to  make  the  canal  available  for  use  and  has  pledged  itself  to  preserve 
to  the  commerce  of  the  world  the  right  to  use  it  upon  fair  and  reasonable  terms, 
Great  Britain  comes  forward  to  enter  its  protest  against  the  exemption  of 
American  coastwise  trade,  with  which,  under  existing  laws,  foreign  nations  can 
not  compete. 

The   British   Protest. 

The  Panama  Canal  act,  providing  for  the  government  of  the  Canal  Zone  and 
exempting  coastwise  trade  from  tolls,  was  enacted  after  a  careful  and  scientific 
inquiry  by  Congress  into  the  conditions  affecting  the  Panama  Canal.  On 
December  9,  1912,  Ambassador  Bryce  filed  with  the  Secretary  of  State  of  the 
United  States  a  protest  against  certain  provisions  of  the  Panama  Canal  act. 
The  protest  was  signed  for  the  British  Government  by  Sir  Edward  Grey.  The 
protest  is  based  on  the  contention  that  the  previsions  of  the  Panama  Canal  act 
contravene  the  provisions  of  the  Hay-Pa imcefote  treaty.  The  particulars  in 
which  this  act  is  claimed  to  be  in  conflict  with  the  treaty  are:  (1)  The  pro- 
visions of  section  5  of  the  act,  which  confer  upon  the  President,  within  certain 
defined  limits,  the  right  to  fix  the  tolls,  but  provide  that  no  tolls  are  to  be 
levied  upon  ships  engaged  in  the  coastwise  trade  of  the  United  States.  There 
is  also  an  exemption  made  pursuant  to  article  19  of  the  Panama  treaty,  accord- 
ing to  which  the  Republic  of  Panama  has  the  right  to  transport  over  the  canal 
its  vessels  and  its  troops  and  munitions  of  war  without  paying  charges  of  any 
kind.  If  the  United  States  should  yield  to  this  part  of  the  British  protest  it 
would  be  necessary  for  it  to  act  in  violation  of  its  treaty  with  the  Republic  of 
Panama.  It  is  claimed  that  these  provisions,  first,  are  in  conflict  with  the 
rule  established  in  article  8  of  the  Clayton-Bulwer  treaty  of  equal  treatment 
for  British  and  United  States  ships ;  and,  second,  would  enable  tolls  to  be  fixed 

95272—12090 


120 

which  would  not  be  just  and  equitable  and  would  therefore  not  comply  with  rule 
1  of  article  3  of  the  Hay-Pauncefote  treaty.  (2)  The  provisions  of  section  11 
of  the  act,  which  prohibit  a  railway  company  subject  to  the  interstate-commerce 
act  of  1837  from  having  any  kiterest  in  vessels  which  operate  through  the 
canal,  and  that  part  of  the  same  section  which  provides  that  a  vessel  permitted 
to  engage  in  coastwise  or  foreign  trade  of  the  United  States  shall  not  be  per- 
mitted to  use  the  canal  if  its  owner  is  guilty  of  violating  the  Sherman  Anti- 
trust Act. 

Both  of  these  claims  rest  upon  the  assumption  that  the  events  which  have 
occurred  since  the  ratification  of  the  Hay-Pauncefote  treaty  can  have  no  effect 
upon  the  validity  of  that  treaty.  In  reference  to  the  claim  based  on  section  11 
of  the  act,  the  protest  makes  no  argument,  but  calls  attention  to  the  fact  that 
if  the  provisions  of  that  section  are  to  be  deemed  applicable  to  British  ships, 
the  British  Government  reserves  the  right  to  amplify  its  protest  after  further 
study  of  the  question  involved.  The  reasons  which  impelled  Congress  to  enact 
section  1  of  the  act  are  obvious.  By  these  provisions  it  was  sought  to  prevent 
monopoly  of  transportation  in  the  canal  and  thus  to  keep  the  canal  open  to  the 
free  competition  of  the  commerce  of  the  world.  Experience  has  taught  the 
lesson  that  when  the  same  company  controls  the  means  of  transportation  by 
land  and  sea  competition  is  rendered  impossible. 

President  Taft,  in  an  effort  to  place  upon  the  Hay-Pauncefote  treaty  a  con- 
struction which  would  make  it  adaptable  to  the  changed  conditions  which  have 
resulted  since  the  acquisition  of  the  Canal  Zone  by  the  United  States,  treated 
the  words  "  all  nations,"  used  in  subdivision  1  of  article  3  of  the  Hay-Paunce- 
fote treaty,  as  excluding  the  United  States.  The  British  protest  refuses  to 
accept  this  construction,  and,  referring  to  the  argument  of  President  Taft, 
announces  plainly  that  "His  Majesty's  Government  believe  this  statement  of  the 
case  to  be  wholly  at  variance  with  the  real  question.  They  consider  that  by  the 
Clayton-Bui wer  treaty  the  United  States  has  surrendered  the  right  to  construct 
the  canal,  and  that  by  the  Hay-Pauncefote  treaty  it  recovered  that  right,  upon 
the  footing  that  the  canal  should  be  open  to  British  and  United  States  vessels 
upon  equal  terms."  Great  Britain,  therefore,  having  explicitly  refused  to  be 
bound  by  any  construction  of  the  treaty  which  recognizes  and  makes  allowance 
for  the  changed  conditions  which  have  resulted. since  the  adaption  of  the  treaty, 
squarely  presents  to  the  United  States  the  alternative  of  adopting  an  American 
canal  policy  or  an  Anglo-American  canal  policy.  Under  the  Clayton-Bulwer 
treaty  Great  Britain  claimed  to  be  a  partner  in  the  canal  enterprise  with  the 
United  States.  Under  the  British  protest,  transmitted  by  Sir  Edward  Grey, 
Great  Britain  still  claims  all  the  benefits  of  a  partnership,  although  all  the 
burdens  of  the  enterprise  are,  under  the  Hay-Pauncefote  treaty,  to  be  borne 
solely  by  the  United  States.  The  importance  of  the  protest  consists,  not  in 
the  fact  that  it  relates  to  tolls,  but  in  the  fact  that  it  carries  with  it  the  asser- 
tion that  the  Hay-Pauncefote  treaty  exists  with  the  same  force  and  effect  to- 
day that  it  possessed  before. the  United  States  became  the  sovereign  over  the 
territory  through  which  the  canal  is  being  constructed.  If  this  claim  be 
admitted  and  the  words  "  all  nations,"  as  used  in  subdivision  1  of  article  3  of 
the  Hay-Pauncefote  treaty,  are  to  be  regarded  as  including  the  United  States, 
then  the  following  consequences  result : 

The  United  States  must  impose  the  same  rate  of  tolls  upon  its  merchant 
ships,  war  ships,  or  Government  vessels  that  it  does  upon  those  of  foreign 
nations ;  it  can  never  blockade  the  canal  or  exercise  any  right  of  war  in  it,  even 
if  it  is  itself  a  belligerent,  and  the  representatives  of  the  United  States  at 
Panama  must  open  the  locks  and  escort  a  hostile  fleet  through  the  canal ;  if 
the  United  States  becomes  a  belligerent  it  shall  not  revictual  or  take  stores  in 
the  canal,  except  when  strictly  necessary:  it  shall  not  embark  or  disembark 
troops  or  munitions  of  Avar  in  the  canal  territory,  and  its  own  war  vessels  shall 
not  remain  in  the  waters  adjacent  to  the  canal  within  the  3-mile  limit  for  longer 
than  24  hours  at  any  one  time;  and  it  can  not  use  the  plant  and  surroundings 
of  the  canal  for  any  hostile  purpose. 

In  short,  if  the  United  States  should  become  a  belligerent,  it  could  not  use 
its  own  canal  for  naval  and  military  purposes,  and  the  canal  would  be  of  no 
more  strategic  value  to  it  than  it  would  be  to  its  enemy.  (Judge  Seabury  is, 
of  course,  stating  these  conclusions  as  a  reducto  ad  absurdum.  The  reply  to 
this  argument,  made  by  those  who  advocate  the  maintenance  of  the  Hay- 
Pauncefote  treaty,  is  that  in  time  of  war  all  treaties  will  be  abrogated,  but  the 
95272—12090 


121 

whole  trend  of  Judge  Seabnry's  argument  is  that  the  treaty  was  abrogated  when 
the  United  States  acquired  the  canal  territory. — The  Editors.) 

Indeed,  in  time  of  war,  if  the  provisions  of  the  Hay-Pa uncefote  treaty  are  to 
govern,  our  seacoast  would  be  more  liable  to  attack  than  it  was  before  the 
canal  was  built.  Before  the  canal  was  built  the  isolation  of  our  seaboard 
furnished  comparative  protection  from  foreign  attack.  The  existence  of  the 
canal  will  make  our  coast  thousands  of  miles  nearer  to  the  shores  of  a  foreign 
enemy.  If  the  canal  shall  be  available  to  us  for  naval  and  military  purposes, 
this  danger  will  be  obviated.  If  it  is  not  to  be  available  for  these  purposes, 
then  we  have  increased  the  danger  of  our  position  rather  than  increased  our 
safety.  One  has  only  to  read  the  provisions  of  the  six  subdivisions  of  article 
3  of  the  Hay-Pauncefote  treaty  to  see  at  a  glance  that  if  one  of  these  subdivi- 
sions is  binding  upon  us  all  are  binding.  The  same  oblirntlon  which  would 
require  us  to  levy  equal  tolls,  as  provided  by  subdivision  1,  would  compel  us  to 
refrain  from  blockading  the  canal  or  from  utilizing  the  canal  for  any  military 
or  naval  purpose  in  the  manner  prohibited  by  the  other  subdivisions  of  article  3. 
The  British  protest  does  not  specifically  claim  that  all  of  these  provisions  of 
the  Hay-Pauncefote  treaty  were  applicable  at  present,  but  it  attacks  a  compara- 
tively unimportant  regulation  of  Congress  upon  a  ground  which  asserts  the 
binding  effect  of  that  treaty.  The  British  protest  makes  no  renunciation  of 
rights  under  the  treaty.  It  does,  however,  recognize  that,  as  a  result  of  events 
subsequent  to  the  treaty,  the  United  States  has  "  become  the  practical  sovereign 
of  the  canal,"  and  that  all  the  provisions  of  the  treaty  are  not  to  be  deemed 
of  the  same  force  that  they  possessed  when  the  treaty  was  concluded.  The 
significance  of  this  remarkable  part  of  the  British-  protest  will  be  commented 
upon  below.  For  the  present  it  is  necessary  only  to  note  that  even  the  British 
Government  recognizes  that  a  change  in  the  status  existing  at  the  time  the 
treaty  was  made  has  taken  place  and  that  it  is  impossible  to  claim  that  the 
legal  effect  of  the  treaty  has  not  been  changed. 

The  State  of  Things  Which  Was  the  Basis  of  the  Hay-Pauncefote  Treaty 
has  Changed,  and  that  Treaty  is  Now  Voidable  at  the  Option  of  the 
United  States. 

It  is  a  rule  of  international  law,  recognized  among  nations  and  publicists, 
that  all  treaties  are  concluded  upon  the  tacit  condition  rebus  sic  stantibus. 
If  vital  changes  affecting  the  subject  matter  of  a  treaty  take  place,  so  that  it 
can  not  fairly  be  said  that  the  parties  contracted  in  reference  to  the  changed 
conditions,  the  treaty  is  by  implication  abrogated.  In  other  words,  if  the  parties 
to  a  treaty  contract  on  the  .basis  that  a  certain  condition  or  fact  exists,  and 
subsequently  the  condition  or  fact  in  reference  to  which  the  treaty  is  made  is 
changed,  the  treaty  is  extinguished,  and  one  of  the  parties  to  it  can  not  in  good 
faith  hold  the  other  bound  to  perform  all  or  any  of  its  terms.  The  fundamental 
fact  in  reference  to  which  the  Hay-Pauncefote  treaty  wras  made  was  that  the 
canal  was  to  be  constructed  in  territory  alien  to  the  United  States.  The  Hay- 
Panucefote  treaty  did  not  even  definitely  decide  upon  the  Panama  route,  but 
provided  for  the  construction  of  a  ship  canal  to  connect  the  Atlantic  and 
Pacific  Oceans  "by  whatever  route  may  be  considered  expedient."  The  treaty 
contemplated  merely  that  the  canal  should  be  constructed  *'  under  the  auspices  " 
of  the  United  States,  not  in  the  territory  of  the  United  States.  That  the  United 
Slates  did  not  contemplate  the  actual  acquisition  of  the  territory  in  which  the 
canal  was  to  be  constructed  is  conclusively  evidenced  by  the  fact  that  the  Senate 
ratified  the  treaty  with  Colombia,  which  merely  provided  for  constructing  the 
canal  "  under  the  auspices  "  of  the  United  States,  and  did  not  contemplate  the 
cession  of  territory  to  the  United  States.  The  failure  of  Colombia  to  fulfill  the 
promise  of  its  accredited  representative,  the  bitterness  and  spirit  of  revolt 
which  that  refusal  engendered  among  the  people  of  the  State  of  Panama,  led 
to  the  revolution  which  resulted  in  the  secession  of  Panama  from  Colombia. 
The  United  States  having  been  betrayed  by  Colombia,  President  Roosevelt,  with 
characteristic  genius,  took  the  action  which  resulted  in  the  United  States 
securing  the  grant  from  Panama.  Under  that  grant  the  Canal  Zone  became 
part  of  the  territory  of  the  United  States  and  subject  to  its  sovereignty,  and 
the  United  States  from  that  time  on  possessed  the  same  exclusive  rights  over  it 
that  it  possessed  in  reference  to  any  other  territory  which  it  acquired  by  cession 
or  conquest. 

95272—12090 


122 

The  Hay-Pauncefote  treaty  was  made  on  the  understanding  that  the  canal 
was  to  be  constructed  upon  alien  territory.  For  this  reason  the  position  of  the 
United  States  relative  to  the  canal  was  regarded  as  analogous  to  the  position 
of  Great  Britain  toward  the  Suez  Canal.  Assuming  that  the  Hay-Pauncefote 
treaty  provides  for  equal  rights  in  the  canal  to  Great  Britain  and  the  United 
States,  although  all  the  burdens  of  building  and  caring  for  it  and  policing  it 
were  to  devolve  upon  the  United  States,  the  situation  becomes  radically  dif- 
ferent after  the  territory  becomes  subject  to  the  sovereignty  of  the  United 
States.  Suppose,  merely  for  the  sake  of  argument,  instead  of  acquiring  the 
Canal  Zone  in  Panama,  the  United  .States  abandoned  that  project  and  con- 
structed the  canal  from  New  Orleans  to  San  Francisco,  would  it  be  contended 
that  the  canal  was  subject  to  the  provisions  of  the  Hay-Pauncefote  treaty? 
In  legal  effect  and  in  principle  the  supposed  case  and  the  real  case  are  identical. 
The  treaty  was  made  on  the  assumption  that  the  canal  was  to  be  built  in  alien 
territory.  The  condition  in  reference  to  which  the  treaty  was  made  never  arose ; 
and  instead  of  the  canal  being  built  in  alien  territory,  it  was  built  in  territory 
of  the  United  States. 

The  juridical  status  of  the  Panama  Canal  is  that  of  an  artifically  constructed 
waterway,  constructed  wholly  by  the  United  States  for  commercial  and  strategic 
purposes,  entirely  through  territory  of  the  United  States,  the  exclusive  right  of 
control  over  which  is  vested  in  the  United  States.  The  legal  position  of  the 
United  States  and  Great  Britain  in  reference  to  the  canal  stands,  when  the  case 
is  reduced  to  its  simplest  terms,  thus:  A  and  B  contract  that  A  shall  endeavor 
to  obtain  an  easement  over  the  land  of  C,  and  if  A  succeeds,  the  easement  shall 
be  used  equally  by  A  and  B,  -but  without  any  prohibition  in  the  contract  against 
either  A  or  B  acquiring  the  fee  to  C's  laud.  Subsequently  C  grants  in  fee  the 
property  to  A  and  his  heirs.  The  judgment  of  the  private  law  of  civilized  states 
in  such  a  case  holds  that  the  contract  between  A  and  B  is  no  longer  of  any- 
legal  force  or  effect. 

The  principle  asserted  above — that  all  treaties  are  concluded  upon  the  tacit 
condition  rebus  sic  stantibus,  and  that,  where  the  state  of  things  which  was 
the  basis  of  the  treaty  and  one  of  its  tacit  conditions  no  longer  exists,  the  treaty 
becomes  voidable,  and  either  party  may  notify  the  other  that  it  regards  the 
treaty  as  abrogated — is  sustained  by  authority.  The  principle  was  clearly  recog- 
nized by  Vattel  (Law  of  Nations,  book  2,  ch.  13,  sec.  200)  and  by  Grotius  (The 
Rights  of  War  and  Peace,  Ch.  XVI,  Sec.  XXV,  et  seq.)  and,  so  far  as  I  have 
been  able  to  discover,  is  denied  by  none.  Mr.  Hall,  in  his  work  on  international 
law,  points  out  that  neither  party  to  an  international  compact  "  can  make  its 
binding  effect  dependent  at  his  will  upon  conditions  other  than  those  con- 
templated at  the  moment  when  the  contract  was  entered  into,  and,  on  the  other 
hand,  a  contract  ceases  to  be  binding  so  soon  as  anything  which  formed  an  im- 
plied condition  of  its  obligatory  force  at  the  time  of  its  conclusion  is  essentially 
altered."  (Sec.  116.)  Mr.  Hannis  Taylor  says: 

So  unstable  are  the  conditions  of  international  existence,  and  so  difficult  is  it  to  enforce 
a  contract  between  States  after  the  state  of  facts  moon  which  it  was  founded  has  sub- 
stantially changed,  that  all  such  agreements  are  necessarily  made  subject  to  the  general 
understanding  that  they  shall  cease  to  be  obligatory  so  soon  as  the  conditions  upon  which 
they  were  executed  are  essentially  altered.  (Treatise  on  International  Public  Law,  sec. 
394.) 

Writing  upon  the  same  subject,  Mr.  Oppenheim  says : 

It  is  an  almost  universally  recognized  fact  that  vital  changes  of  circumstances  may  be 
of  such  a  kind  as  to  justify  a  party  in  notifying  an  unnotiflable  treaty.  The  vast 
majority  of  publicists,  as  well  as  all  the  Governments  of  the  members  of  the  family  of 
nations,  agree  that  all  treaties  are  concluded  under  the  tacit  condition  rebus  sic  stantibus. 
(Vol.  1,  p.  550,  sec.  539.) 

That  the  circumstances  have  changed  to  such  an  extent  that  some  of  the 
provisions  of  the  Hay-Pauncefote  treaty  are  extinguished  is  impliedly  con- 
ceded by  Sir  Edward  Grey  in  the  British  protest.  He  says: 

Now  that  the  United  States  has  become  the  practical  sovereign  of  the  canal  His 
Majesty's  Government  do  not  question  its  title  to  exercise  belligerent  rights  for  its 
protection. 

His  statement  suggests  that  if  it  had  been  contemplated  that  the  United 
States  was  to  acquire  the  territory  through  which  the  canal  should  be  con- 
structed clauses  would  have  been  inserted  in  the  treaty  which  would  have  estab- 
lished the  status  of  the  United.  States  as  similar  to  that  accorded  Turkey  and 
Egypt  in  reference  to  the  Sueg  Canal.  It  is,  of  course,  not  improbable,  if  the 

95272 — 12090 


123 

possibility  of  the  acquisition  by  the  United  States  had  been  foreseen,  that  Great 
Britain  would  have  made  even  this  suggestion ;  but  it  ought  not  to  be  assumed 
that  the  United  States  would  have  consented  to  occupy  toward  its  own  canal  an. 
attitude  similar  to  that  which  European  powers,  under  the  direction  of  Great 
Britain,  have  accorded  Turkey  and  Egypt,  toward  the  Suez  Canal. 

The  statement  made  in  the  British  protest  indicates  that  the  next  contention 
of  Great  Britain  will  be  that  the  Hay-Pauneefote  treaty  has  been  constructively 
modified  so  as  to  make  articles  10  and  13  of  the  Suez  Canal  convention  appli- 
cable to  the  United  States.  However  this  may  be,  it  is  needless  to  speculate. 
The  important  circumstance  now  to  be  noted  is  that  although  Great  Britain 
does  not  ask  for  a  formal  modification  of  the  Hay-Pauncefote  treaty,  nor  re- 
nounce any  legal  rights  she  may  have  under  the  treaty,  the  concession  is  dis- 
tinctly made  that  the  changed  conditions  have  modified  some  of  the  provisions 
of  the  treaty.  Although  this  concession  does  not  define  which  of  the  stipula- 
tions of  the  treaty  the  British  Government  considers  to  have  been  extinguished, 
it  apparently  concedes  certain  belligerent  rights  to  the  United  States  which,  if 
the  provisions  of  the  Hay-Pauncefote  treaty  were  in  force,  the  United  States 
would  not  possess.  There  is  no  justification  for  the  claim  that  the  abrogation 
of  the  provisions  of  the  treaty  has  been  pro  tanto.  If  the  state  of  things  which 
was  the  vital  condition  of  the  treaty  no  longer  exists,  the  whole  treaty  justly 
may  be  abrogated.  One  thing  is  plain  as  to  the  legal  effect  of  the  treaty: 
Either  all  of  its  stipulations  are  binding  upon  the  United  States  or  none  of  them 
is  binding.  From  a  juridical  standpoint  the  change  which  has  taken  place  is 
the  most  fundamental  that  could  occur.  The  very  subject  matter  of  the  treaty, 
which  the  treaty  contemplated  should  continue  to  be  territory  alien  to  the 
United  States,  has  become  absolutely  subject  to  the  sovereignty  of  the  United 
States.  To  hold,  under  these  circumstances,  that  all  the  terms  of  the  treaty 
are  binding  upon  the  United  States  would  be  preposterous  and  does  not  seem  to 
be  claimed  in  the  British  protest.  The  same  circumstances  which  relieve  the 
United  States  of  some  of  the  terms  of  the  treaty  relieve  it  of  all  of  them.  It 
can  hardly  be  asserted,  if  changes  so  vital  occur  that  some  of  the  terms  of  a 
treaty  are  extinguished,  one  of  the  parties  to  the  treaty  can  determine  which  of 
the  other  provisions  of  the  treaty  shall  continue  to  be  binding  upon  the  other 
party  to  the  compact.  As  some  of  the  terms  of  this  treaty  are  concededly  no 
longer  binding,  none  of  them  is  binding  if  the  United  States  shall  so  elect. 
The  Hay-Pa uncefote  treaty  has  now  become  voidable,  and  the  United  States  is 
entirely  justified  under  accepted  principles  of  international  law  in  notifying 
Great  Britain  that  it  no  longer  considers  that  treaty  to  be  in  force.  If  the 
United  States  is  to  adopt  an  American  canal  policy,  this  it  must  do.  If  it  does 
not  do  this,  is  must  admit  the  claim  of  Great  Britain  to  be  an  equal  partner 
with  the  United  States  in  the  canal  enterprise.  The  latter  course  involves  the 
establishment  of  an  Anglo-American  canal  policy  in  direct  defiance  of  the 
Monroe  doctrine,  and  it  will  create  an  entangling  alliance  which  in  the  future 
must  inevitably  be  the  source  of  dissension  and  strife. 

Conclusion. 

The  question  has  arisen  whether  the  controversy  as  to  the  Panama  Canal 
should  be  submitted  to  the  Tribunal  of  The  Hague  for  arbitration.  Sir  Edward 
Grey,  in  the  British  protest,  suggests  that  if  the  provisions  of  the  Panama  Canal 
act  to  which  objection  is  made  are  not  repealed  the  question  at  issue  should  be 
submitted  to  arbitration.  This  suggestion  involves  the  consideration  of  two 
questions :  First,  does  the  arbitration  treaty  require  the  submission  of  the  ques- 
tion at  issue  to  arbitration?  and,  second,  if  it  does  not  so  require,  should  the 
United  States  consent  to  the  submission  of  this  question  to  arbitration? 

If  existing  treaties  require  the  submission  of  the  question  to  arbitration,  the 
matter  is  settled,  and  nothing  remains  to  the  United  States  but  to  adopt  this 
course.  The  convention  of  1899  for  the  arbitration  of  international  disputes 
was  signed  by  the  representatives  of  the  United  States  subject  to  a  reservation 
which  is  set  forth  at  length  after  their  signatures.  That  reservation  .is  as 
follows : 

Nothing  contained  In  this  convention  shall  be  so  construed  as  to  require  the  United 
States  of  America  t9  depart  from  its  traditional  policy  of  not  entering  upon,  interfering 
with,  or  entangling  itself  in  the  political  questions  of  policy  or  internal  administration  of 
any  foreign  State  :  nor  shall  anything  contained  in  the  said  convention  be  construed  to 
imply  a  relinquishment  by  the  United  States  of  America  of  its  traditional  attitude  toward 
purely  American  questions, 
95272—12090 


124 

Inasmuch  as  the  Panama  Canal  is  constructed  in  territory  exclusively  sub- 
ject to  the  sovereignty  of  the  TTnited  States,  any  question  as  to  its  control  is  a 
purely  American  question,  as  to  which  the  United  States,  in  signing  the  treaty 
referred  to,  refused  to  relinquish  its  traditional  attitude.  The  traditional  atti- 
tude of  the  United  States  is  inconsistent  with  the  submission  to  arbitration  of 
any  question  as  to  a  part  of  the  territory  over  which  its  exclusive  sovereignty 
extends.  That  the  Monroe  doctrine  represents  the  traditional  attitude  of  the 
TTnited  States  will  not  be  questioned,  nor  will  it  be  seriously  urged  that  the 
United  States  should  submit  to  arbitration  the  question  as  to  whether  it  should 
adhere  to  or  renounce  the  Monroe  doctrine  as  a  part  of  its  national  policy. 
That  doctrine  involves  one  of  the  very  questions  which  the  representatives  of 
the  United  States  reserved  the  right  to  withhold  from  arbitration.  It  has  never 
been  a  doctrine  which  commended  itself  to  European  statesmen,  but  it  defines  a 
policy  essential  to  the  development  and  national  existence  of  the  United  States. 
The  controversy  as  to  the  control  of  the  Panama  Canal  is  of  precisely  the  same 
character,  and  the  reservation  made  by  the  representatives  of  the  United  States 
in  signing  the  arbitration  treaty  relieves  the  United  States  from  submitting 
this  question  to  arbitration.  As  to  whether  it  would  be  good  policy  to  submit 
this  particular  question  to  arbitration  may  be  safely  left  to  the  good  judgment 
of  the  American  Congress.  Congress,  realizing  the  unfortunate  experiences 
which  the  United  States  has  had  in  dealing  with  the  Panama  Canal,  may  well 
hesitate  to  jeopardize  the  present  position  which  the  United  States  has  attained 
by  submitting  so  purely  an  American  question  to  the  arbitrament  of  a  foreign 
tribunal. 

The  treaty  of  April  4,  1908,  between  the  United  States  and  Great  Britain 
provides  that  "  differences  which  may  arise  of  a  legal  nature  or  relating  to  the 
interpretation  of  treaties  existing  between  the  two  contracting  parties,  and 
which  it  may  not  have  been  possible  to  settle  by  diplomacy,  shall  be  referred  fo 
the  Permanent  Court  of  Arbitration  established  at  The  Hague  by  the  conven- 
tion of  the  29th  of  July,  1899,  provided,  nevertheless,  that  they  do  not  affect 
the  vital  interests,  the  independence,  or  the  honor  of  the  two  contracting  States, 
and  do  not  concern  the  interests  of  third  parties." 

This  treaty  imposes  upon  the  United  States  no  obligation  to  arbitrate  the 
present  controversy,  because  that  controversy  does  not  relate  "  to  the  interpre- 
tation of  treaties  existing  between  the  two  contracting  parties." 

It  has  already  been  pointed  out  that  the  Hay-Pa uncefote  treaty  is  now  void- 
able and  may  be  rendered  void  by  the  United  States  giving  notice  to  Great 
Britain  of  the  election  so  to  declare  the  treaty.  Moreover,  it  is  plain  that  the 
present  controversy  falls  squarely  within  the  exception  contained  in  the  clause 
of  the  treaty  quoted  above.  The  question  at  issue  does  affect  the  vital  interests, 
the  independence,  and  the  honor  of  the  United  States.  It  is  a  question  which 
does  concern  the  Republic  of  Panama,  and  therefore  is  not  referable  as  a  matter 
of  right  under  this  treaty.  The  exemption  of  vessels  of  the  Republic  of  Panama 
from  tolls,  under  the  provisions  of  the  Panama  Canal  act,  was  provided  for  in 
compliance  with  article  19  of  the  Panama  treaty.  The  British  protest  is  against 
this  provision  of  the  act.  If  this  question  is  submitted  to  arbitration  and  should 
be  determined  adversely  to  us,  the  United  States  would  be  obliged  either  to 
comply  with  the  award  of  the  Arbitration  Tribunal  and  violate  its  treaty  with 
Panama  or  to  violate  the  arbitration  aw^ard  and  comply  with  its 'treaty  with 
Panama.  The  question  at  issue  does,  therefore,  "  concern  the  interests  of  third 
parties,"  and  is  one  in  reference  to  which  the  treaty  provides  that  it  need  not  be 
submitted  to  arbitration. 

The  adoption  of  an  American  canal  policy  is  in  accord  with  the  best  traditions 
of  the  United  States.  It  is  the  only  policy  which  can  be  pursued  consistent 
with  the  maintenance  of  the  Monroe  doctrine.  The  utterances  of  American 
statesmen  which  are  sometimes  quoted  as  favoring  a  contrary  policy  were  utter- 
ances made  on  the  assumption  that  the  canal  was  to  be  built  on  territory  alien 
to  the  United  States.  The  position  assumed  by  President  Cleveland  was  based 
on  the  desire  to  avoid  "  entangling  alliances  "  with  the  country  through  which 
it  was  supposed  the  canal  would  be  constructed.  The  traditional  attitude  of 
the  Amercan  people  in  reference  to  the  canal  was  expressed  by  Gen.  Grant 
when  he  said,  "  I  commend  an  American  canal  on  American  soil  to  the  American 
people."  After  a  century  crowded  with  difficulties  and  vicissitudes,  the  Panama 
Canal,  as  the  result  of  American  genius,  is  about  to  be  opened  to  the  world.  It 
is  constructed  wholly  on  territory  subject  to  the  sovereignty  of  the  United- 
States,  and  that  country  is  shortly  to  determine  whether  it  will  pursue  in  regard 

95272—12090 


125 

to  it  an  American  policy  or  whether,  disregarding  the  lessons  of  experience  and 
in  violation  of  American  traditions,  it  will  admit  Great  Britain  as  an  equal 
partner  in  the  enterprise.  If  an  Anglo-American  policy  is  desired,  the  United 
States  will  comply  with  the  demands  contained  in  the  British  protest.  If  an 
American  canal  policy  is  to  be  adopted,  the  Government  at  Washington  will 
deal  in  no  uncertain  way  with  the  British  protest.  The  present  is  no  time  for 
vacillation  or  hesitancy.  The  requirements  of  the  situation  demand  that  the 
Government  at  Washington  shall  plainly  inform  the  British  Government  that 
the  conditions  under  which  the  Hay-Pa uncefote  treaty  was  concluded  have 
vitally  changed,  and  that  that  treaty  is  now,  under  the  principles  of  interna- 
tional law,  voidable,  and  give  notice  that  the  United  States  regards  it  as  with- 
out force  or  effect. 

Such  action  is  required  by  every  consideration  of  justice,  and  should  be 
taken  without  equivocation.  Any  other  course  will  involve  gross  injustice  to 
the  United  States,  and  will  serve  only  to  postpone  the  time  when  the  United 
States,  in  self-defense,  will  be  compelled  to  take  the  position  suggested.  As 
the  Hay-Pauncefote  treaty  is  now  voidable  rather  than  void,  the  Government 
of  the  United  States  should  see  to  it  that  no  action  or  failure  to  act  on  its 
part  shall  be  construed  into  a  renunciation  of  the  rights  which  at  present,  under 
well-settled  principles,  it  possesses. 

Just  and  courageous  action  on  the  part  of  the  United  States  will  remove  all 
difficulties  which  are  presented  by  the  Hay-Pauncefote  treaty  and  leave  the 
pathway  free  for  the  adoption  of  an  American  canal  policy.  An  American 
canal,  constructed  by  American  enterprise  on  American  soil,  subject  to  the 
absolute  and  exclusive  control  of  the  United  States,  will  prove  a  safeguard  in 
times  of  war  and  in  times  of  peace  will  confer  the  greatest  benefits  not  only 
upon  the  United  States  but  upon  all  mankind. 


[From  Senate  Document  No.  40,  Sixty-third  Congress,  first  session. — House  Document  No. 
1313,  Sixty-second  Congress,  third  session.] 

PANAMA   CANAL    TOLLS. 

(Article  prepared  hy  the  law  officer  of  the  Isthmian  Canal  Commission,  Mr.  Frank 
Feuille,  regarding  tolls  on  the  Panama  Canal.) 

(Jan.  28,   1913. — Ordered  to  be  printed.) 

The  provision  of  the  Panama  Canal  act,  recently  enacted  by  Congress,  which 
discriminates  in  favor  of  American  coastwise  shipping  and  the  vessels  of  the 
Republic  of  Panama,  has  brought  forth  a  protest  from  the  British  Government 
and  unfavorable  comment  from  the  press  at  home  and  abroad. 

It  is  claimed  that  the  United  States  have  violated  treaty  obligations  in 
exempting  American  ships  from  toll  charges  at  the  canal ;  that,  in  consenting 
to  the  Hay-Pauncefote  treaty,  Great  Britain  surrendered  valuable  rights  held 
by  her  under  the  Clayton-Bulwer  treaty ;  that  without  the  Hay-Pauncefote 
treaty  the  United  States  could  not  build  and  maintain  the  canal  alone,  and 
that  the  surrender  of  her  rights  under  the  Clayton-Bulwer  treaty  constituted 
a  valid  consideration  entitling  Great  Britain  to  equal  treatment  for  her  ships 
with  those  of  the  United  States  at  the  canal.  The  question  is  an  historical 
one  to  some  extent.  It  might  be  well  to  refer  briefly  to  the  history  of  the 
subject. 

In  1850  the  United  States  and  Great  Britain  entered  into  an  agreement,  com- 
monly known  as  the  Clayton-Bulwer  convention,  to  promote  the  building  of  a 
canal  by  the  Nicaraguan  route,  and,  wThen  constructed,  to  jointly  protect  it 
against  unjust  detention,  confiscation,  seizure,  or  any  violation  whatsoever. 
The  contracting  parties  also  agreed  that  neither  would  erect  fortifications  at 
the  canal  or  its  vicinity,  and  that  neither  would  directly  or  indirectly  obtain 
the  exclusive  benefit  of  the  canal  or  assume  or  exercise  any  dominion  over 
Nicaragua,  Costa  Rica,  the  Mosquito  coast,  or  any  part  of  Central  America. 
The  Mosquito  coast,  over  which  Great  Britain  was  then  attempting  to  exercise 
jurisdiction,  is  situated  in  the  vicinity  of  the  Atlantic  entrance  of  the  pro- 
posed Nicaraguan  Canal. 
95272—12090 


126 

The  United  States  had  two  purposes  in  view  in  making  the  convention — 
to  stop  Great  Britain's  encroachment  upon  Central  American  territory  and 
to  remove  the  obstruction  at  the  Atlantic  entrance  of  the  canal  resulting  from 
the  English  assumption  of  jurisdiction  over  the  Mosquito  coast. 

One  of  the  important  provisions  of  the  treaty  was  that  prohibiting  any 
discrimination  in  the  use  of  the  canal  in  favor  of  either  of  the  contracting 
parties  as  against  the  other.  The  point  is  covered  in  the  following  explicit 
language : 

The  Governments  of  the  United  States  and  Great  Britain  hereby  declare  that  neither 
the  (,ije  nor  the  other  will  ever  obtain  or  maintain  for  itself  any  exclusive  control  over 
the  ship  canal ;  *  *  *  nor  will  the  United  States  or  Great  Britain  take  advantage 
of  any  intimacy,  or  use  any  alliance,  connection,  or  influence  that  either  may  possess 
with  any  State  or  Government  through  whose  territory  the  said  canal  may  pass  for  the 
purpose  of  acquiring  or  holding,  directly  or  indirectly,  for  the  citizens  or  subjects  of  the 
one  any  rights  or  advantages  in  regard  to  commerce  or  navigation  though  the  said  canal 
which  shall  not  be  offered  on  the  same  terms  to  the  citizens  or  subjects  of  the  other. 

There  are  other  provisions  to  the  same  effect  in  the  treaty.  It  is  significant 
that  the  explicit  language  of  the  Clayton-Bulwer  convention  in  respect  to 
equality  of  treatment  of  the  contracting  parties  was  not  emplpyed  in  the  Hay- 
Pa  uncefote  treaty.  This  will  be  discussed  later  on  in  this  paper. 

The  convention  applied  to  the  Nicaraguan  route  and  to  Central  America  a  IK! 
not  to  the  Panama  route  or  South  America,  of  which  the  Isthmus  of  Pan-nan, 
forms  a  part. 

It  is  true  that  Article  VIII  of  the  treaty  did  obligate  the  parties  to  extern! 
their  protection  by  treaty  stipulations  to  the  Panama  route  or  the  Tehuantepec 
route,  but  no  such  treaty  stipulations  were  ever  effected. 

Inasmuch  as  Article  VIII  of  the  Clayton-Bulwer  convention  is  referred  to  in 
the  Hay-Pauncefote  treaty,  it  might  be  well  to  quote  it  here  at  length: 

AST.  VIII.  The  Governments  of  the  United  States  and  Great  Britain,  having  not  only 
desired,  in  entering  into  this  convention,  to  accomplish  a  particular  object,  but  also  to 
establish  a  general  principle,  they  hereby  agree  to  extend  their  protection,  by  treaty  stipu- 
lations, to  any  other  practicable  communications,  whether  by  canal  or  railway,  across  the 
isthmus  which  connects  North  and  South  America,  and  especially  to  the  interoceanic  com- 
munications, should  the  same  prove  to  he  practicable,  whether  by  canal  or  railway,  which 
are  now  proposed  to  be  established  by  the  way  of  Tehuantepec  or  Panama.  In  granting, 
however,  their  joint  protection  to  any  such  canals  or  railways  as  are  by  this  article 
specified  it  is  always  understood  by  the  United  States  and  Great  Britain  that  the  parties 
constructing  or  owning  the  same  shall  impose  no  other  charges  or  conditions  of  traffic 
thereupon  than  the  aforesaid  Governments  shall  approve  of  as  just  and  equitable ;  and 
that  the  same  canals  or  railways,  being  open  to  the  citizens  and  subjects  of  the  United 
States  and  Great  Britain  on  equal  terms,  shall  also  be  open  on  like  terms  to  the  citi- 
zens and  subjects  of  every  other  State  which  is  willing  to  grant  thereto  such  protection, 
as  the  United  States  and  Great  Britain  engage  to  afford. 

When  the  Clayton-Bulwer  convention  was  made  the  United  States  was  under 
treaty  obligations  with  New  Granada,  now  Colombia,  to  guarantee  positively 
and  efficaciously  to  that  Government  the  perfect  neutrality  of  the  isthmus  of 
Panama,  with  the  view  that  the  free  transit  from  one  to  the  other  sea  might 
not  be  interrupted  or  embarrassed  while  the  treaty  existed,  and,  in  consequence, 
the  United  States  also  guaranteed  in  the  same  manner  the  rights  of  sovereignty 
and  property  which  New  Granada  possessed  over  said  territory.  In  other 
words,  the  United  States  was  exercising  a  protectorate  over  the  Isthmus  of 
Panama  in  1850,  when  the  Clayton-Bulwer  convention  was  made.  In  return 
for  the  protection  afforded  the  Government  of  New  Granada,  the  United 
States  were  to  enjoy  all  the  exemptions,  privileges,  and  immunities  concern- 
ing commerce  and  navigation  which  then  or  thereafter  might  be  enjoyed  by 
Granadian  citizens,  their  vessels  and  merchandise;  and  this  equality  of  favors 
was  to  extend  to  the  passengers,  correspondence,  and  merchandise  of  the 
United  States  in  their  transit  across  the  said  territory  from  one  sea  to  the 
other  upon  any  means  of  communication  established  or  to  be  established. 

The  Clayton-Bulwer  convention  did  not  impair  the  treaty  between  the  United 
States  and  New  Granada.  Doubtless  the  existence  of  the  latter  treaty  caused 
Article  VIII  to  be  inserted  in  the  Clayton-Bulwer  convention  so  that  by  further 
treaty  stipulations  that  convention  could  be  made  extensive  to  Panama  with  the 
consent  of  New  Granada.  Without  a  material  modification  of  the  treaty  with 
the  latter  country,  the  Clayton-Bulwer  convention  could  not  have  been  applied 
to  Panama. 

However,  no  treaty  stipulations  for  the  extension  of  the  Clayton-Bulwer  con- 
vention to  the  Panama  Canal  were  ever  effected,  and,  therefore,  that  convention 
only  applied  to  the  Nicaraguan  route  and  Central  America. 
95272—12090 


127 

The  Clayton-Bulwer  convention  remained  in  existence  for  51  years;  that  is 
to  say.  from  1850  to  1901,  wlien  it  was  superseded  by  the  Hay-Pauncefote 
treaty,  and  in  all  that  time  nothing  of  consequence  was  done  by  Great  Britain 
to  promote  the  construction  of  the  canal.  Hence  the  claim  that  the  Clayton- 
Bulwer  convention  had  become  obsolete  has  some  merit. 

No  one  familiar  with  the  trend  of  public  opinion  in  the  United  States  hut 
knows  that  the  American  people  had  concluded  to  build  the  canal  independently 
of  any  other  nation  when  the  Hay-Pauucefote  treaty  was  made,  and  had  not 
that  treaty  been  entered  into  there  is  no  doubt  that  the  moribund  convention 
of  1850  would  have  been  abrogated  by  our  Government  in  response  to  popular 
demand. 

The  Hay-Pauncefote  treaty,  made  in  1901,  did  not  affect  the  treaty  made 
between  the  United  States  and  New  Granada,  or  Colombia  as  it  is  now  called-, 
respecting  the  Isthmus  of  Panama.  Hence,  the  United  States,  without  inter- 
ruption, has  been  under  treaty  obligations  since  1S46  to  protect  the  Panama 
route  and  to  maintain  the  neutrality  of  transit  over  the  Isthmus.  Neither  the 
Clayton-Bulwer  convention  nor  the  Hay-Pauncefote  treaty  relieved,  the  United 
States  of  the  burden ;  and  the  preferential  treatment  accorded  to  the  commerce 
of  the  United  States  across  the  Isthmus  of  Panama,  in  compensation  for  that 
burden,  was  not  diminished  or  impaired  by  either  of  the  conventions  between 
England  and  the  United  States  above  mentioned.  The  right  held  by  the  United 
States  under  the  Colombian  treaty  was  equivalent  to  an  easement  over  the 
Isthmus  of  Panama,  and  this  easement  ripened  into  a  fee  simple  title  when  the 
treaty  with  Panama  was  made  in  1903.  Whence  comes  England's  right  to  claim 
equal  treatment  with  the  United  States  at  the  Isthmus?  She  did  not  get  it 
under  the  Clayton-Bulwer  convention,  nor  by  virtue  of  the  Hay-Pauncefote 
treaty.  The  treaty  between  the  United  States  and  Panama  added  nothing  to 
England's  rights  under  the  Hay-Pauncefote  treaty.  The  Clayton-Bulwer  con- 
vention and  the  Hay-Pauncefote  treaty  left  the  status  at  the  Isthmus  unchanged 
vnid:  T  which  the  United  States  held  special  commercial  privileges  over  that  ter- 
ritory. That  the  United  States  are  now  the  owners  of  the  territory,  instead  of 
being  the  holders  of  an  easement,  can  not  change  the  status.  Hence  the  United 
States  now  have  rights,  commercial  and  otherwise,  at  the  Isthmus  superior  to 
those  of  England,  as  they  have  had  since  1846. 

It  is  claimed  by  Great  Britain  that  the  consideration  for  superseding  the 
CK-iyton-Bulwer  convention  was  to  secure  equality  of  treatment  for  her  ships 
with  those  of  the  United  States  at  the  canaL  There  is  no  such  consideration 
expressed  in  the  Hay-Pauncefote  treaty  nor  in  the  correspondence  between  the 
two  Governments  leading  to  the  making  of  that  treaty ;  nor  d6es  such  a  consid- 
eration arise  by  implication  from  a  correct  reading  of  the  instrument.  But  a 
fc.ir  construction  of  it  would  permit  of  the  suggestion  that  England's  prime 
motive  was  to  obtain  the  use  of  a  shorter  route  to  the  Pacific  through  a  canal 
built  without  cost  to  her,  and  the  neutrality  of  which  was  to  be  maintained  by 
the  United  States  singly  and  alone.  If  Great  Britain's  contentions  were  correct, 
the  benefit  to  the  United  States  from  the  abrogation  of  the  Clnyton-Bulwer 
convention  would  not  be  apparent.  The  English  contention  means  that  the 
United  States  renounced  all  benefits  under  the  Clayton-Bulwer  convention  and 
yet  retained  the  burdens  and  obligations  of  that  instrument,  not  only  in  respect 
to  England,  but  the  other  nations  of  the  world  as  well,  although  they  were  not 
parties  to  the  convention;  and  these  burdens  must  be  assumed  in  regard  to  a 
canal  over  which  the  Clnyton-Bulwer  convention  could  not  have  been  extended 
without  further  treaty  stipulations  with  New  Granada  -as  a  party.  Surely  the 
burden  is  upon  the  party  asserting  such  a  claim  to  establish  it  by  satisfactory 
evidence  beyond  doubt. 

If  the  claim  of  Great  Britain  is  conceded  that  she  surrendered  certain  rights 
in  respect  to  the  Nicaragmm  canal  when  she  consented  to  the  abrogation  of  the 
Clnyton-Bulwer  convention,  she,  in  turn,  was  relieved  of  the  joint  obligation 
to  promote  the  building  of  the  canal  and  to  protect  it  and  maintain  its  neu- 
trality when  built.  It  is  fair  to  assume  that  the  latter  compensated  for  the 
former.  Be  that  as  it  may.  Great  Britain  agreed  to  the  Hay-Pauncefote  treaty, 
and  that  treaty  superseded  the  Clayton-Bulwer  convention. 

But  Great  Britain  will  receive  other  considerations  of  incalculable  value  to 
her  for  agreeing  to  the  abrogation  of  the  Clayton-Bulwer  convention.  Her  ton- 
nage in  steam  and  sail  ing  vessels  is  greater  than  that  of  the  other  maritime 
nations  combined.  It  is  not  unfr.ir  to  Great  Britain  to  say  that  the  relative 
advantage  to  come  to  her  from  the  opening  of  the  canal  will  be  in  like  propor- 

05272—12090 


128 

tion :  and  her  great  superiority  over  the  other  nations  in  tonnage  will  give  her  a 
most  favored  position  in  the  trade  with  the  west  coast  of  this  hemisphere. 

She  has  great  possessions  in  Asia  and  Australia  and  other  part  of  Oceania; 
the  Panama  Canal  will  give  her  another  highway  to  reach  them. 

The  benefits  to  come  to  her  from  the  canal  will  not  stop  here.  We  know  that 
British  America  is  larger  than  the  United  States,  excluding  Alaska,  and  British 
Columbin  in  the  western  part  of  Canada  contains  vast  lumber  regions  and  im- 
mense wheat  fields  which  are  just  beginning  to  be  developed.  The  opening  of 
the  canal  will  turn  immigration  toward  the  Canadian  Pacific,  and  the  future 
should  bring  a  flourishing  trade  between  that  region  and  Great  Britain  in  the 
exchange  of  manufactures  for  Canadian  wheat  and  lumber. 

But  these  are  not  all  the  advantages  which  England  will  obtain  from  the 
canal.  Canr.da  has  hundreds  of  miles  of  coast  on  the  Atlantic  and  three  or 
four  hundred  miles  of  coast  on  the  Pacific,  and  is  traversed  by  transcontinental 
railroads.  These  conditions  will  make  British  America  a  most  valuable  base 
for  the  operations  of  the  English  Navy  in  both  oceans  when  the  canal  is  built 
and  thus  the  efficiency  of  England's  navy  will  be  increased-  almost  equally  with, 
our  own. 

These  are  some  of  the  benefits  that  England  is  to  receive  from  the  canal.  It 
is  fair  to  assume  that  she  considered  them  sufficient  to  compensate  her  for 
agreeing  to  the  abrogation  of  the  almost-forgotten  Clayton-Buhver  convention, 
so  that  there  might  be  no  obstacle  to  the  building  of  the  canal  by  the  United 
States.  Were  the  Panama  Canal  project  abandoned  at  this  time  England 
would  probably  be  injured  by  the  abandonment  as  much  as  the  United  States; 
and  yet  the  burden  of  building  the  canal  and  of  maintaining  its  neutrality 
thereafter  is  entirely  on  the  United  States.  England  has  no  obligations  in  that 
respect. 

However,  if  we  are  under  treaty  obligations  to  treat  England's  ships  on  an 
equality  with  our  own  at  the  canal,  it  is  our  duty  to  respect  them.  But  have 
we  assumed  such  obligations?  An  answer  to  the  question  depends  on  the 
meaning  of  the  Hay-Pauncefote  treaty.  The  treaty  was  made  in  Washington 
on  the  ioth  day  of  November,  1901.  Its  purpose,  as  declared  in  the  preamble, 
was  to  remove  any  objection  which  might  arise  out  of  the  convention  of  April 
19,  1850,  known  as  the  Clayton-Bulwer  convention,  to  the  construction  of  the 
canal  under  the  auspices  of  the  United  States,  without  impairing  the  "  general 
principle  "  of  neutralization  established  under  Article  VIII  of  that  convention. 
The  articles  of  the  Hay-Pauncefote  treaty  are  so  interdependent  that  it  is 
necessary  to  construe  them  together  in  order  to  get  at  the  true  meaning  of  the 
instrument,  and  for  that  purpose  they  are  here  set  out  in  full : 

ARTICLE  I.  The  high  contracting  parties  agree  that  the  present  treaty  shall  super- 
sede the  aforementioned  convention  of  the  19th  of  April,  1850. 

\RT.  II.  It  is  agreed  that  the  canal  may  he  constructed  under  the  auspices  of  the 
Government  of  the  United  States,  either  directly  at  its  own  cost  or  by  gift  or  loan  of 
money  to  individuals  or  corporations,  or  through  subscription  or  purchase  of  stock 
or  shares,  and  that,  subject  to  the  provisions  of  the  present  treaty,  the  said  Govern- 
ment shall  have  and  enjoy  all  the  rights  incident  to  such  construction,  as  well  as  the 
exclusive  riirht  of  providing  for  the  regulation  and  management  of  the  canal. 

4i-T.  III.  'The  United  States  adopts  as  the  basis  of  neutralization  of  such  ship  canal 
the  following  rules  substantially  as  embodied  in  the  convention  of  Constantinople,  signed 
the  28th  day  of  October,  1888,  for  the  free  navigation  of  the  Suez  Canal ;  that  is  to  say  : 

"  1.  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and  of  war  of  all 
nations  observing  these  rules  on  terms  of  entire  equality,  so  that  there  shall  be  no 
discrimination  against  any  such  nation  or  its  citizens  or  subjects  in  respect  to  the 
conditions  or  charges  of  traffic,  or  otherwise.  Such  conditions  and  charges  of  traffic 
shall  be  just  and  equitable. 

"  2  The  canal  shall  never  be  blockaded,  nor  shall  any  right  of  war  he  exercised 
nor  any  act  of  hostility  be  committed  within  it.  The  United  States,  however,  shall  be 
at  liberty  to  maintain  such  military  police  along  the  canal  as  may  be  uesessary  to  protect 
it  against  lawlessness  and  disorder. 

"lJ.  Vessels  of  war  of  a  belligerent  shall  not  take  any  stores  in  the  canal  except  so 
far  as  may  be  strictly  necessary ;  and  the  transit  of  such  vessels  through  the  canal 
shall  be  effected  with  the  least  possible  delay  in  accordance  with  the  regulations  in 
force,  and  with  only  such  intermission  as  may  result  from  the  necessities  of  the  service. 
Prizes  shall  be  in  all  respects  subject  to  the  same  rules  as  vessels  of  war  of  belligerents. 

"  4.  No  belligerent  shall  embark  or  disembark  troops,  munitions  of  war,  or  warlike 
materials  in  the  canal,  except  in  case  of  accidental  hindrance  of  the  transit,  and  in  such 
case  the  transit  shall  be  resumed  with  all  possible  dispatch. 

"  5.  The  provisions  of  this  article  shall  apply  to  waters  adjacent  to  the  canal  within 
3  marine  miles  of  either  end.  Vessels  of  war  of  a  belligerent  shall  r-ot  remain  in  such 
waters  longer  than  24  hours  at  any  one  time,  except  in  case  of  distress,  and  in  such 
case  shall  depart  as  soon  as  possible  ;  but  a  vessel  of  war  of  one  belligerent  shall  not 
depart  within  24  hours  from  the  departure  of  a  vessel  of  war  of  the  other  belligerent. 

"  6.  The  plant,  establishment,  buildings,  and  all  works  necessary  to  the  construction, 
maintenance,  and  operation  of  the  canal  shall  be  deemed  to  be  a  part  thereof  for  the 
purposes  of  this  treaty,  and  in  time  of  war,  as  in  time  of  peace,  shall  enjoy  complete 
05272—12090 


129 

immunity  from  attack  ov  injury  by  belligerents  and  from  acts  calculated  to  impair  their 
usefulness  as  part  of  the  canal." 

ART.  IV.  It  is  agreed  that  no  change  of  territorial  sovereignty  or  of  the  international 
relations  of  the  country  or  countries  traversed  by  the  aforementioned  canal  shall  affect 
the  general  principles  of  neutralization  or  the  obligation  of  the  high  contracting  parties 
under  the  present  treaty. 

Those  articles  contain  all  the  material  provisions  of  the  Hay-Pa uncefote 
treaty. 

The  declaration  in  the  preamble  of  the  Hay-Pauncefote  treaty  that  it  is  not 
intended  to  impair  the  general  principle  of  neutralization  established  by  Article 
VIII  of  the  Clayton-Bulwer  convention  has  been  urged  against  any  proposition 
to  favor  American  ships  at  the  canal. 

The  argument  is  based  on  the  assumption  that  the  terms  "  general  principle 
of  neutralization  "  used  in  the  preamble  include  traffic  conditions  within  their 
scope  and  meaning.  But  the  assumption  is  not  justified.  They  mean  immunity 
from  attack  and  nothing  else.  It  is  true  the  article  in  question  does  provide 
that  the  canal  shall  be  open  to  the  citizens  and  subjects  of  the  United  States 
and  Great  Britain  on  equal  terms,  but  that  was  simply  a  statement  of  the  con- 
sideration to  each  of  the  two  contracting  parties  for  the  protection  they  were 
to  extend  to  the  canal.  There  are  two  separate  elements  expressed  in  the 
article — one,  the  protection  of  the  canal,  and  the  other  the  equality  of  treat- 
ment of  the  contracting  parties  in  return  for  that  protection. 

The  general  principle  which  the  parties  desired  to  extend  to  the  Panama 
route  was  one  of  protection,  that  is  to  say,  neutralization.  That  proposition  is 
expressed  in  the  first  sentence  of  the  article.  The  equality  of  treatment  of  the 
contracting  parties  is  another  thought  expressing  the  consideration  in  return 
for  the  protection  of  the  canal,  and  is  found  in  the  second  sentence  of  the  same 
article.  The  term  "  neutralization "  is  not  employed  by  international  law 
writers  to  mean  equality  of  treatment  in  respect  to  traffic  conditions.  The  evi- 
dent purpose  of  the  Hay-Pauncefote  treaty  was  to  secure  immunity  from  attack 
for  the  canal.  No  other  meaning  can  be  given  to  the  word  "  neutralization." 

The  language  of  Article  II  of  the  Hay-Pauncefote  treaty  is  quite  clear,  and 
unless  its  terms  are  modified  by  some  subsequent  provisions  of  that  treaty,  it 
concedes  to  the  United  States  the  enjoyment  of  all  of  the  rights  incident  to  the 
construction  of  the  canal  as  well  as  the  exclusive  right  for  the  regulation  and 
management  of  the  same.  Is  there  any  provision  in  the  treaty  which  modifies 
Article  II?  It  will  be  noted  that  the  provisions  relating  to  neutrality  provided 
for  in  the  Clayton-Bulwer  convention  are  announced  therein  by  the  United 
States  and  Great  Britain  jointly,  while  in  the  Hay-Pauncefote  treaty  the  United 
States  alone  establishes  the  rules.  The  partnership  arrangement  existing  be- 
tween the  two  countries  under  the  Clayton-Bulwer  convention  has  terminated, 
and  the  rules  for  the  neutralization  of  the  canal  under  the  later  treaty  were 
enacted  by  the  United  States  and  must  be  maintained  by  that  Government 
alone.  Those  rules  are  to  be  observed  by  other  nations,  and  not  by  the  United 
States.  If  this  statement  is  true,  then  the  rule  of  equality  does  not  apply  to 
the  United  States. 

Great  Britain's  contention  is  that  rule  1  does  apply  to  the  United  States,  and 
that,  in  effect,  would  be  reading  into  the  rule  the  words  "  with  the  vessels  of 
the  United  States,"  so  that  the  language  of  the  rule  then  would  be  as  follows : 

The  canal  shall  be  free  and  open  to  vessels  of  commerce  and  war  of  all  nations  observ- 
ing these  rules  on  terms  of  entire  equality  with  the  vessels  of  the  United  States. 

We  do  not  believe  that  any  such  construction  can  be  given  to  rule  1  if  read 
in  the  light  of  the  other  provisions  of  the  treaty. 

The  language  of  Article  II  is  very  clear  and  affirmative: 

The  United  States  shall  have  and  enjoy  all  the  rights  incident  to  the  construction  of  the 
canal,  as  well  as  the  exclusive  right  of  providing  for  its  regulation  and  management. 

These  words  can  not  be  limited  or  impaired  by  implication.  It  requires  an 
express  provision  in  the  treaty  to  minimize  their  effect,  and  none  such  can  be 
found  therein. 

The  claim  now  advanced  by  Great  Britain  is  confined  to  the  subject  of  canal 
tolls,  but  with  equal  propriety  it  might  include  all  benefits  given  to  American 
vessels  of  war  or  commerce  at  the  canal.  The  rule  of  equality  is  not  limited  to 
canal  tolls,  but  relates  to  any  discrimination  in  respect  to  the  charges  or  con- 
ditions of  traffic  or  otherwise,  and  includes  vessels  of  war  and  vessels  of  com- 
merce. Consequently,  no  favors  could  be  shown  to  our  warships  in  the  use  of 
dry  docks,  anchorage  basins,  pilotage,  coaling  privileges,  commissaries,  and 
95272—12090 9 


130 

other  conveniences  at  the  canal  without  extending  like  privileges  to  foreign  war 
vessels. 

Those  who  denied  our  right  to  fortify  the  canal  relied  on  the  broad  language 
of  the  rule  to  sustain  their  contention,  and  if  England's  claim  in  respect  to  tolls 
is  correct  it  would  seem  that  the  objection  made  to  our  fortifying  the  canal 
would  be  equally  well  taken.  If  the  rule  of  equality  places  American  ships  on 
the  same  basis  with  foreign  ships,  then  our  belligerent  vessels  will  not  be 
authorized  to  revictual  or  take  any  stores  in  the  canal  except  when  strictly 
necessary,  and  all  the  other  rules  restricting  the  use  of  the  canal  by  belligerents 
will  apply  to  us.  However,  that  doctrine  has  not  been  admitted  by  the  people 
of  the  United  States,  and  for  that  matter,  England  has  recognized  our  right  to 
fortify  the  canal  and  to  do  anything  necessary  to  protect  it,  and  that  carries 
with  it  an  admission  of  a  superior  right  in  our  warships  to  the  use  of  the  canal. 

The  British  protest  assumes  that  the  Hay-Pauncefote  treaty  did  not  admit  of 
the  United  States  protecting  the  territory  on  which  the  canal  was  to  be  built  be- 
cause the  United  States  was  not  then  the  owner  of  it.  The  protest  overlooks 
the  imporant  fact  that  at  that  very  time  the  United  States  was  under  treaty 
obligation  with  Colombia  to  maintain  the  neutrality  of  the  Isthmus  and  to  guar- 
antee the  sovereignty  right  of  that  country  therein,  and  that  treaty  obligation 
was  not  diminished  in  any  respect  by  the  Hay-Pa  uncefote-  treaty.  Again,  when 
the  Hay-Pauncefote  treaty  was  first  submitted  to  the  Senate  it  contained  a  pro- 
vision to  prohibit  the  United  States  from  fortifying  the  canal.  The  Senate 
rejected  the  provision,  and  England  accepted  the  treaty  with  the  provision 
eliminated.  In  discussing  the  elimination  of  that  provision,  Lord  Lansdowne, 
in  a  memorandum  dated  August  3,  1901,  used  this  language: 

In  my  dispatch  I  pointed  out  the  dangers  of  a  construction  in  which  one  clause  per- 
mitted the  adoption  of  defensive  measures  while  another  prohibited  the  erection  of 
fortifications.  It  is  most  important  that  no  doubt  should  exist  as  to  the  intention  of  the 
contracting  parties.  As  to  this,  I  understand  that  by  the  omission  of  all  reference  to  the 
matter  of  defense  the  United  States  desire  to  reserve  the  power  to  protect  the  canal  at 
any  time,  when  the  United  States  may  be  at  war,  from  destruction  or  damage  at  the 
hands  of  an  enemy  or  enemies.  On  the  other  hand,  I  conclude  that,  with  the  above 
exception,  there  is  no  intention  to  derogate  from  the  principles  of  neutrality  laid  down 
by  the  rules.  As  to  the  first  of  these  propositions,  I  am  not  prepared  to  deny  that  con- 
tingencies may  arise,  when,  not  only  from  a  national  point  of  view,  but  in  behalf  of  the 
commercial  interests  of  the  whole  world,  it  might  be  of  supreme  importance  to  the  United 


tingencies  may  arise,  when,  not  only  from  a  national  point  of  view,  but  in  behalf  of  the 
commercial  interests  of  the  whole  world,  it  might  be  of  supreme  importance  to  the  United 
States  that  they  should  be  free  to  adopt  measures  for  the  defense  of  the  canal  at  a 


moment  when  they  were  themselves  engaged  in  hostilities. 

It  is  also  to  be  borne  in  mind  that  owing  to  the  omission  of  the  words  under  which 
this  country  became  jointly  bound  to  defend  the  neutrality  of  the  canal,  and  the  abroga- 
tion '  of  the  Clayton-Bulwer  treaty,  the  obligations  of  Great  Britain  will  be  materially 
diminished. 

Thus  we  see  that  the  attempt  to  make  the  rules  of  neutrality  applicable  to  the 
United  States  was  without  success.  So  that  our  right  to  fortify  the  canal  may 
be  said  to  be  well  established,  and  the  right  to  fortify  carries  with  it  the  fur- 
ther righ.t  to  use  the  canal  with  our  belligerent  ships  when  necessary  to  prevent 
hostile  fleets  or  armies  from  entering  the  canal.  If  ships  of  war  and  of  com- 
merce of  other  nations  have  an  equal  right  with  those  of  the  United  States  in 
the  matter  of  tolls  it  would  be  difficult  for  our  Government  to  maintain  that 
our  belligerent  ships  have  more  rights  in  the  canal  than  those  of  any  other  bel- 
ligerent. Inasmuch  as  the  burden  of  maintaining  the  neutrality  of  the  canal  is 
upon  the  United  States  alone  it  follows  that  our  warships  are  not  within  the 
rule  of  equality  laid  down  in  rule  1,  and  that  being  so,  it  would  be  playing  fast 
and  loose  with  the  rule  to  include  our  commercial  vessels  within  its  provisions 
and  not  do  likewise  with  our  vessels  of  war. 

In  discussing  the  belligerent  rights  of  the  United  States  at  the  canal,  the 
British  note  of  protest  of  November  14,  1912,  says : 

Now  that  the  United  States  has  become  the  practical  sovereign  of  the  canal,  His 
Majesty's  Government  do  not  question  its  title  to  exercise  belligerent  rights  for  its 
protection. 

The  writer  of  the  protest  does  not  seem  to  have  had  in  mind  the  fact  that  the 
United  States  has  been  under  treaty  obligations  since  1846  to  protect  the  Isth- 
mus and  to  maintain  the  neutrality  of  the  transit  across  it,  and  that  Lord  Lans- 
downe, during  the  negotiations  for  the  Hay-Pauncefote  treaty,  recognized,  not 
only  our  right,  but  that  it  was  our  duty,  to  protect  the  canal.  Were  we  so 
inclined,  we  might  rest  our  case  on  the  admission  contained  in  the  protest; 
that  the  acquisition  by  the  United  States  of  the, territory  over  which  the  canal 
is  being  constructed  was  sufficient  of  itself  to  modify  the  treaty  so  as  to  accord 
belligerent  rights  to  our  warships.  If  the  acquisition  of  the  territory  will  thus 
benefit  our  war  vessels,  it  is  hard  to  conceive  how  equal  favors  to  our  vessels 
95272—12090 


131 

of  commerce  are  to  be  withheld  under  such  circumstances.  At  least  one  dis- 
tinguished American  diplomat  has  maintained  that  the  acquisition  by  the 
United  States  of  the  canal  strip  did  change  the  treaty  status  so  as  to  authorize 
the  exemption  of  American  merchant  ships  from  the  payment  of  tolls.  No 
doubt,  he  will  be  pleased  at  discovering  that  Great  Britain,  in  her  protest, 
lends  comfort  to  his  views. 

Viewed  in  the  light  of  the  circumstances  and  conditions  attending  the  execu- 
tion of  the  Hay-Pauncefote  treaty,  and  construing  rule  1  in  connection  with  the 
other  terms  of  the  instrument,  thnt  rule  simply  amounts  to  what  is  known  in 
treaties  as  "the  most-favored-nation  clause."  In  other  words  the  rule  means 
that  the  nations  observing  the  rules  of  neutralization  laid  down  in  the  treaty 
by  the  United  States  shall  be  preferred  in  the  use  of  the  canal  without  discrimi- 
nation in  favor  of  one  of  such  nations  as  against  the  other. 

It  has  been  said  that  language  substantially  the  same  as  that  of  rule  1  of  the 
Hay-Pauncefote  treaty  is  employed  in  the  treaty  of  Washington  between  the 
United  States  and  Great  Britain  relating  to  the  Canadian  and  American  canals 
and  the  use  of  the  Great  Lakes  and  the  St.  Lawrence  River,  and  that  discrimi- 
nation in  favor  of  the  ships  of  either  of  the  contracting  parties  is  not  allowed 
under  the  latter  treaty.  It  is  true  that  entire  equality  is  observed  in  the 
treatment  of  vessels  of  the  parties  to  the  Washington  treaty,  but  it  is  so 
because  the  treaty  itself  clearly  and  affirmatively  prohibits  a  discrimination 
in  favor  of  one  of  the  parties  as  against  the  other.  The  statement  that  the 
language  of  the  Washington  treaty  is  substantially  that  of  the  Hay-Pauncefote 
treaty  is  incorrect.  Article  XXVII  of  the  Washington  treaty  leaves  nothing 
to  inference,  but  expressly  says  that  Great  Britain  will  engage  to  urge  upon 
the  Canadian  Government  to  secure  to  the  citizens  of  the  United  States  the  use 
of  the  Well  and,  St.  Lawrence,  and  other  canals  in  the  Dominion  on  terms  of 
equality  with  the  inhabitants  of  the  Dominion ;  and  the  United  States  engages 
that  the  subjects  of  Great  Britain  shall  enjoy  the  use  of  the  St.  Clair  Flats 
Canal  on  terms  of  equality  with  the  inhabitants  of  the  United  States,  and 
engages  to  urge  upon  the  State  governments  to  secure  to  the  subjects  of  Great 
Britain  the  use  of  the  several  State  canals  connected  with  the  navigation  of 
the  lakes  or  rivers  traversed  by  or  contiguous  to  the  boundary  line  between  the 
possessions  of  the  high  contracting  parties,  on  terms  of  equality  with  the 
inhabitants  of  the  United  States. 

Here  we  have  unequivocal  declarations  that  there  shall  be  equality  of  treat- 
ment between  the  contracting  parties.  There  is  no  such  declaration  in  the 
Hay-Pauncefote  treaty. 

It  has  also  been  said  that  the  rule  of  equality,  as  expressed  in  the  Hay- 
Pauncefote  treaty,  is  the  same  as  that  laid  down  in  the  Suez  Canal  convention. 
But  again  we  say  that  the  statement  is  not  correct.  Article  I  of  the  Suez  con- 
vention reads  as  follows : 

The  Suez  Maritime  Canal  shall  always  be  free  and  open,  in  time  of  war  as  in  time  of 
peace,  to  every  vessel  of  commerce  or  of  war  icithout  distinction  of  flag. 

The  words  "  without  distinction  of  flag,"  which  I  have  underscored,  make 
the  meaning  quite  clear  that  all  nations  shall  stand  upon  an  equal  footing. 
There  is  no  such  language  in  rule  1  of  the  Hay-Pauncefote  treaty. 

The  correspondence  between  the  United  States  and  Great  Britain  leading  up 
to  the  Hay-Pauncefote  treaty  throws  much  light  on  the  subject.  Rule  1 
received  the  most  serious  consideration  in  the  diplomatic  negotiations  pre- 
ceding the  adoption  of  the  treaty,  and  that  England's  great  solicitude  was  to 
secure  for  herself  equal  treatment  with  other  nations  appears  from  Lord 
Lansdowne's  communication  to  Lord  Pauncefote  on  October  23,  1901,  on  this 
subject,  in  which  he  said  in  part : 

I  informed  the  United  States  charge  d'affaires  to-day  that  His  Majesty's  Government 
had  given  their  careful  attention  to  the  various  amendments  which  have  been  suggested 
in  the  draft  of  the  interoceanic  canal  treaty,  communicated  by  Mr.  Hay  to  your  Lordship 
on  the  25th  of  April  last,  and  that  I  was  now  in  a  position  to  inform  him  officially  of 
our  views. 

Mr.  Hay  suggested  that  in  Article  III.  Rule  1,  we  should  substitute  for  the  words  "  the 
canal  shall  be  free  and  open  to  vessels  of  commerce  and  of  war  of  all  nations  which  shall 
agree  to  observe  these  rules,  etc."  the  words  "  the  canal  shall  be  free  and  open  to  the 
vessels  of  commerce  and  of  war  of  all  nations  observing  these  rules,"  and  in  the  same 
clause,  as  a  consequence  of  the  amendment,  substitute  for  the  words  "  any  nation  so 
agreeing,"  the  words  "  any  such  nation."  His  Majesty's  Government  were  prepared  to 
accept  this  amendment,  which  seemed  to  us  equally  efficacious  for  the  purpose  which  we 
had  in  view,  namely,  that  of  insuring  that  Great  Britain  should  not  be  placed  in  a  less 
advantageous  position  than  any  other  poirer,  while  they  stopped  short  of  conferring  upon 
other  nations  a  contractual  right  to  the  use  of  the  canal.  (The  italics  are  mine.) 
95272—12090 


132 

The  reasonable  inference  to  be  drawn  from  the  language  of  the  English 
negotiator  is  that  he  was  seeking  to  obtain  the  most-favored-nation  clause  for 
Great  Britain  and  nothing  more.  We  must  bear  in  mind  that  the  Clayton- 
Bulwer  convention  contained  provisions  prohibiting  the  contracting  parties 
from — 

Acquiring  or  holding,  directly  or  indirectly,  for  the  citizens  or  subjects  of  the  one  any 
rights  or  advantages  in  regard  to  commerce  or  navigation  through  the  said  canal  which 
shall  not  be  offered  on  the  same  terms  to  the  subjects  of  the  other. 

The  fact  that  no  such  language  was  employed  or  sought  to  be  employed  by 
Great  Britain  in  the  Hay-Pauncefote  treaty  is  significant,  and  would  seem  to 
support  the  conclusion  that  she  only  desired  equal  treatment  with  other  nations, 
especially  as  she  had  assumed  no  obligation  in  respect  to  the  canal  that  would 
not  be  expected  of  the  other  nations  using  it,  that  is  to  say,  that  none  of  them 
would  do  any  act  in  the  canal  unfriendly  to  the  United  States.  That  obligation 
rests  upon  all  civilized  nations  at  peace  with  us,  without  the  necessity  of  a 
treaty. 

But  we  need  not  leave  our  case  here.  It  became  necessary  for  the  United 
States  to  enter  into  a  treaty  with  the  Republic  of  Panama  to  obtain  the  right  of 
way  across  the  Isthmus  of  Panama  for  the  construction  of  the  canal  and 
political  jurisdiction  over  the  Canal  Zone.  In  part  consideration  for  the  cession 
of  the  canal  strip  by  the  Republic  of  Panama,  the  United  States  agreed  that 
the  vessels  of  the  Panaman  Government  should  have  free  transportation  over 
the  canal  at  all  times.  This  is  a  discrimination  in  favor  of  the  vessels  of 
Panama,  inasmuch  as  no  other  nation  has  that  privilege,  but  it  is  quite  con- 
sistent with  the  most-favored-nation  clause. 

The  concession  to  the  vessels  of  Panama,  it  is  said,  was  necessary  in  order 
to  acquire  a  right  of  way  over  which  to  build  the  canal  and.  in  consequence, 
the  privilege  granted  to  Panama  was  proper  and  did  not  militate  against  the 
proposition  that  the  United  States  must  treat  the  vessels  of  all  nations  on 
terms  of  entire  equality  with  their  own  vessels.  The  argument  would  create 
the  anomalous  situation  in  which  Panama  occupied  a  position  superior  to 
all  nations,  including  the  United  States.  In  addition,  the  argument  begs  the 
question  entirely.  If  Great  Britain's  claim  is  correct,  the  United  States  could 
not  have  made  any  such  concession  to  Panaman  vessels  without  violating  the 
Hay-Pauncefote  treaty,  and  in  order  to  keep  within  that  treaty  some  other 
consideration  would  have  had  to  be  given  to  Panama  in  lieu  of  the  exemption 
accorded  to  h^r  ships. 

But  the  concession  to  Panama  is  quite  consistent  with  the  most-favored- 
nation  clause.  That  clause  does  not  prevent  the  granting  of  a  special  privilege 
to  another  nation,  provided  a  special  consideration  is  given  in  return  for  the 
privilege.  The  most-favored-nation  clause  can  not  be  understood  to  mean  that 
a  country  should  enjoy  as  a  free  gift  that  which  is  accorded  to  other  nations 
for  a  full  equivalent;  that  is  to  say,  Great  Britain,  if  she  observes  the  rules 
of  neutrality  laid  down  in  the  Hay-Pauncefote  treaty,  shall  enjoy  the  canal  on 
an  equal  footing  with  all  other  nations  observing  those  rules,  but  the  rule  would 
be  unequal  as  to  Panama  if  she  were  required  to  surrender  the  Canal  Zone 
to  the  United  States  besides  having  to  observe  the  rules  of  neutrality.  Hence, 
Panama  is  entitled  to  a  free  canal  for  her  vessels,  because  she  has  given  a 
special  consideration  for  the  privilege  which  the  other  nations  have  not.  This 
doctrine  has  been  generally  recognized,  and  especially  by  Great  Britain. 

The  United  States  entered  into  a  commercial  treaty  with  the  Hawaiian 
Islands  in  1876,  by  the  terms  of  which  mutual  trade  concessions  were  made  by 
the  two  Governments.  At  that  time  Great  Britain  and  Hawaii  had  a  treaty 
containing  the  most-favored-nation  clause.  The  British  Government  admitted 
that— 

as  the  advantages  conceded  to  the  United  States  by  the  Sandwich  Islands  are  expressly 
stated  to  be  given  in  consideration  of  and  as  an  equivalent  for  certain  reciprocal  conces- 
sions on  the  part  of  the  United  States,  Great  Britian  can  not  as  a  matter  of  right,  claim 
the  same  advantages  for  her  trade  under  the  strict  letter  of  the  treaty  of  1851. 

We  do  not  find  that  Great  Britain's  consent  was  asked  by  the  United  States 
before  the  concession  was  made  to  Panaman  vessels,  nor  does  it  appear  that 
Great  Britain  made  any  protest,  It  is  fair  to  assume  that  she  recognized  the 
right  of  the  United  States  to  extend  the  privilege  of  a  free  canal  to  Panaman 
vessels  in  leturn  for  the  cession  of  the  Canal  Zone  and  jurisdiction  over  i 
our  Government.  It  would  seem  that  England  could  not  very  well  admit  a  right 
to  the  United  States  in  this  and  yet  contend  for  her  present  construction  of 

95272—12090 


133 

rule  1 — that  English  ships  and  those  of  other  nations  observing  the  rules  are 
entitled  to  use  the  canal  on  terms  of  entire  equality  with  those  of  the  United 
States. 

It  is  true  that  Great  Britain  now  protests  against  the  exemption  of  Panama 
vessels,  but  this  objection,  coming  as  it  does  nine  years  after  the  making  of  the 
treaty,  when  the  canal  is  almost  completed,  does  not  deserve  serious  considera- 
tion. The  only  purpose  it  can  serve  is  that  of  demonstrating  that  England 
now  recognizes  that  she  can  not  concede  our  right  to  exempt  Panaman  vessels 
without  surrendering  her  case. 

We  might  pursue  the  most-favored-nation  theory  further.  On  January  9, 
1909,  the  United  States,  Colombia,  and  Panama  negotiated  what  was  known 
as  the  tripartite  agreement,  by  which  the  United  States  granted  to  Colombia 
the  right  to  convey  through  the  canal  her  troops,  materials  of  war,  and  ships 
of  war  without  paying  any  duty  to  the  United  States.  The  agreement  was 
negotiated  by  our  State  Department  with  the  executive  departments  of  Colom- 
bia and  Panama  and  was  ratified  by  our  Senate  and  the  Assembly  of  Panama, 
but  was  rejected  by  the  Congress  of  Colombia,  and  hence  did  not  become 
effective.  The  exemption  from  the  payment  of  duties  at  the  canal  in  favor 
of  Colombian  vessels  could  have  been  made  only  upon  the  theory  that  rule  1 
accords  to  England  nothing  more  than  most-favored-nation  treatment.  Although 
Great  Britain  protested  against  the  exemption  of  Colombian  ships,  the  protest 
does  not  seem  to  have  been  as  insistent  as  the  one  she  now  presents.  Not- 
withstanding the  English  protest  made  at  the  time,  our  State  Department  car- 
ried forward  the  agreement,  our  Senate  ratified  it,  and  it  failed  only  because  the 
Colombian  Congress  rejected  it. 

The  issue  now  pending  with  England  has  had  full  consideration  by  the 
United  States  Government.  Our  State  Department,  in  making  the  canal  treaty 
with  Panama  and  the  tripartite  agreement  with  Colombia  and  Panama,  and 
the  Senate  in  ratifying  this  convention,  have  demonstrated  that  the  treaty- 
making  power  of  the  United  States  has  not  been  in  accord  with  the  English 
view  of  the  subject.  And  now  the  Congress  of  the  United  States  has  spoken 
out  against  Great  Britain's  claim  and  has  enacted  the  Panama  -Canal  act,  by 
which  American  shipping  and  the  vessels  of  the  Government  of  Panama  are 
favored  at  the  canal. 

We  might  still  pursue  the  doctrine  a  little  further — that  the  most-favored- 
nation  clause  does  not  preclude  a  Government  from  granting  special  concessions 
to  other  nations  in  return  for  special  favors.  Suppose  the  United  States,  with 
some  other  maritime  power  as  an  ally,  were  to  engage  in  a  war;  would  it  be 
correct  to  say  that  we  could  not  admit  the  belligerent  ships  of  our  ally  into 
the  canal  on  an  equal  footing  with  our  vessels?  The  American  people  would 
hardly  concede  that,  and  it  may  well  be  doubted  that  Great  Britain  would 
admit  it  were  she  the  ally. 

The  issue  has  been  discussed  in  this  paper  as  though  the  burden  were  upon 
the  United  States  in  the  argument.  As  a  matter  of  fact,  the  onus  is  on  Great 
Britain  to  establish  her  contention.  Great  Britain,  in  effect,  is  claiming  a 
servitude  upon  our  property — the  canal — and  a  limitation  on  our  sovereignty. 
Her  claim,  if  valid,  means  that  we  must  tax  our  imports  and  exports  and  our 
coastwise  trade  passing  through  the  canal  equally  with  the  trade  of  other 
countries  using  that  waterway.  That  means  a  serious  restriction  upon  the 
sovereign  right  of  the  United  States  to  regulate  their  fiscal  and  economic 
policies  as  they  may  deem  best.  The  restriction  would  amount  to  a  limitation 
of  our  sovereignty  as  well  as  a  servitude  imposed  upon  our  territory. 

It  is  a  well-established  rule  of  international  law  that  one  sovereign  can  not 
claim  a  servitude  on  the  territory  of  another  except  by  compact,  and — 

if  a  dispute  occurs  between  a  territorial  sovereign  and  a  foreign  power  as  to  the  extent 
or  nature  of  rights  enjoyed  by  the  latter  within  the  territory  of  the  former,  the  presump- 
tion is  against  the  foreign  State,  and  upon  it  the  burden  lies  of  proving  its  claim  beyond 
doubt  or  question. 

In  summing  up  the  objections  to  the  British  claim,  we  might  say  that  the 
commercial  advantages  which  the  United  States  has  at  the  Isthmus  came  from 
the  treaty  with  Colombia  of  1846  and  not  from  the  Clayton-Bulwer  convention 
or  the  Hay-Pauncefote  treaty,  and  neither  of  these  affected  the  rights  so  held 
by  us;  that  the  terms  of  the  Hay-Pauncefote  treaty,  when  properly  construed, 
do  not  sustain  it;  that  in  abandoning  the  explicit  language  of  the  Clayton- 
Bulwer  convention,  which  clearly  prohibited  a  discrimination  in  favor  of  the 
United  States,  England  lost  her  right  to  claim  at  this  time  equality  with  the 

95272—12090 


134 

United  States  in  the  use  of  the  canal  for  her  vessels;  that  Lord  Lansdowne's 
communication  of  October  23,  1901,  to  Lord  Pauncefote,  already  mentioned, 
tends  to  prove  that  England's  only  desire  was  to  obtain  equality  of  treatment 
with  other  powers  for  her  vessels  at  the  canal  and  nothing  more;  that  the 
canal  treaty  with  the  Republic  of  Panama  by  which  the  vessels  of  the  Re- 
public are  entitled  to  the  free  use  of  the  canal,  made  without  protest  from 
Great  Britain,  is  a  strong  circumstance  in  support  of  the  proposition  that  rule  1 
is  nothing  more  than  the  most-favored-nation  clause  expressed  in  another  form ; 
and,  lastly,  Great  Britain  has  not  produced  any  sufficient  proof  to  overcome  the 
presumption  arising  against  her  from  the  circumstances  just  related ;  much 
less  has  she  adduced  any  proof  or  argument  to  establish  her  claim  beyond 
doubt  or  question. 

Many  of  our  citizens  believe  that  the  issue  between  Great  Britain  and  the 
LTnited  States  on  the  subject  of  canal  tolls  should  be  submitted  to  The  Hague 
tribunal  for  determination  under  the  provisions  of  the  arbitration  treaty  be- 
tween the  two  countries.  This  assumes  that  the  question  is  a  justiciable  one. 
The  treaty  does  not  require  all  questions  that  may  arise  between  the  two 
countries  to  be  submitted  to  The  Hague.  It  does  say  that  "  differences  which 
may  arise  of  a  legal  nature  or  relating  to  the  interpretation  of  treaties  existing 
between  the  two  contracting  parties,  and  which  it  may  not  have  been  possible 
to  settle  by  diplomacy,  shall  be  referred  to  the  permanent  court  of  arbitration, 
etc."  But  the  same  clause  of  the  treaty  contains  a  proviso  modifying  the  rule 
so  laid  down  to  the  effect  that  neither  of  the  parties  is  bound  to  submit  ques- 
tions affecting  its  vital  interests,  its  independence,  its  honor,  or  the  interests 
of  third  parties. 

We  have  seen  that  the  issue  does  affect  the  vital  interests  as  well  as  the 
independence  of  the  United  States,  inasmuch  as  the  English  claim  imposes  a 
limitation  upon  our  sovereignty  and  a  servitude  on  our  territory,  so  as  to 
materially  impair  our  right  to  freely  adopt  such  economic  and  fiscal  policies 
as  we  may  deem  best,  and  we  are  not  at  liberty  to  use  our  own  with  freedom. 
The  question  is  a  vital  one  and  of  the  most  serious  importance  to  the  people 
of  the  United  States,  because  all  of  the  maritime  powers  of  the  world  are 
equally  interested  with  England  in  obtaining  a  decision  adverse  to  the  United 
States.  And  yet  we  are  expected  to  submit  the  issue  to  a  tribunal  that  is  con- 
trolled by  these  same  maritime  powers. 

It  has  been  said  that  if  the  United  States  refused  to  submit  the  question  to 
The  Hague,  the  arbitration  treaty  may  as  well  be  destroyed.  The  answer  to 
that  is:  If  the  question  does,  in  fact,  affect  our  vital  interests  or  our  inde- 
pendence, then  there  is  no  authority  for  its  submission  to  that  tribunal.  The 
proviso  which  excludes  such  questions  from  the  jurisdiction  of  The  Hague  is 
just  as  binding  on  the  parties  as  any  other  part  of  the  treaty,  and  the  necessity 
for  its  observance  is  accentuated  when  the  question  is  one  in  which  the  powers 
controlling  the  court  are  vitally  interested.  I  do  not  intend  to  reflect  on  The 
Hague  tribunal,  but  am  simply  stating  the  facts.  In  this  instance,  the  judges 
would  also  be  parties  at  interest. 


REFERENCE  TO  NEWSPAPER  COMMENT  AND  RESOLUTIONS 
UPHOLDING  RIGHT  OF  UNITED  STATES  TO  CONTROL  PANAMA 
CANAL. 

[From  the  Congressional  Record,  Mar.  4,  1913.] 

Mr.  KNOWLAND.  Mr.  Speaker,  following  the  article  are  inserted  comments 
from  newspapers  upholding  the  position  of  this  Government  in  the  canal  con- 
troversy which  have  come  to  my  notice  since  February  6.  On  that  day  I  in- 
serted in  the  Record  similar  newspaper  comments  and  resolutions  from  every 
section  of  the  United  States,  favoring  the  provision  of  the  Panama  Canal  bill 
granting  free  tolls  to  American  ships  in  the  coastwise  trade,  which  occupied 
nearly  nine  pages  of  the  Record.  These  clippings  show  that  there  has  been 
no  change  of  public  sentiment,  regardless  of  the  campaign  now  being  waged  by 
the  trascontinental  railroads  to  bring  about  the  repeal  of  the  free- toll  section 
of  the  Panama  Canal  act. 

[See  Congressional  Record,  Feb.  6  and  Mar.  4,  1913.] 

95272—12090 

O 


14  DAY  USE 

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